U.S. SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-K

ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF 
THE SECURITIES EXCHANGE ACT OF 1934
 For year ended December 31, 2007 Commission File No. 0-28575

GLOBAL AIRCRAFT SOLUTIONS, INC.

(Exact name of small business issuer as specified in its charter)

| |                                          |  |                         
| | ---------------------------------------- |  | ------------------------
| | NEVADA                                   |  | 84-1108499              
| | (State or other jurisdiction of          |  | (I.R.S. Employer        
| | Incorporation or organization)           |  | Identification No.)     
|
| | 6901 South Park Avenue                   |  |                         
| | Tucson, Arizona 85706                    |  | (520) 294-3481          
| | (Address of Principal Executive Offices) |  | (Issuer's Telephone No.)
|
| | Securities registered pursuant to        |  |                         
| | Section 12(b) of the Act:                |  | NONE                    

|                                  |  |  |  |                                          
|--------------------------------- |  |  |  | -----------------------------------------
|Securities registered pursuant to
|Section 12(g) of the Act:        
|                                 
|Title of Each Class               |  |  |  | Name of Exchange on Which Reported       
|Common stock, $.001 par value     |  |  |  | Over the Counter Bulletin Board (OTCBB)

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in rule 405 of the securities Act. [    ] Yes [ X ] No

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or section 15 (d) of the Act. [    ] Yes [ X ] No

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for at least the past 90 days. [X] Yes [ ] No

Indicate by check mark if disclosure of delinquent filers in response to Item 405 of Regulation S-K is not contained herein, and will not be contained, to the best of registrant's knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K. [X]

Indicate by check mark whether the Registrant is an accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of large accelerated filer, accelerated filer and smaller reporting company in Ruble 12b-2 of the Exchange Act. (Check one): Large accelerated filer [    ] Accelerated filer [    ] Non-accelerated filer [    ] Smaller reporting company [ X]

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). [ ] Yes [X] No

Number of shares of common Stock outstanding as of February 29, 2008 was 40,181,301. The aggregate market value of Global stock held by non-affiliates as of June 30, 2007, the last day of business of our most recently completed second fiscal quarter was $26,096,641, which is based upon a closing share price of $.84 per share as reported on the OTCBB.



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|-------- |  |  | ----------------------------------------------------------------------------- |  | --
|         |  |  | Table of Contents                                                             |  |   
|Part I   |  |  |                                                                               |  |   
|         |  |  |                                                                               |  |   
|Item 1.  |  |  | Business                                                                      |  | 3 
|1A.      |  |  | Risk Factors                                                                  |  | 12
|Item 1B. |  |  | Unresolved Staff Comments                                                     |  | 14
|Item 2.  |  |  | Properties                                                                    |  | 14
|Item 3.  |  |  | Legal Proceedings                                                             |  | 15
|Item 4.  |  |  | Submission of Matters to a Vote of Security Holders                           |  | 16
|        
|Part II  |  |  |                                                                               |  |   
|         |  |  |                                                                               |  |   
|Item 5.  |  |  | Market for Registrants Common Equity, Related Stockholder Matters and Issuer |  | 16
|         |  |  | Purchases of Equity Securities                                                |  |   
|Item 6.  |  |  | Managements Discussion and Analysis of Financial Condition and Results       |  | 19
|Item 7.  |  |  | Financial Statements                                                          |  | 27
|Item 8.  |  |  | Changes in and Disagreements with Accountants on Accounting                   |  |   
|         |  |  | and Financial Disclosure                                                      |  | 27
|Item 8A. |  |  | Controls and Procedures                                                       |  | 28
|Item 9.  |  |  | Directors, Executive Officers and Corporate Governance                        |  | 28
|Item 10. |  |  | Executive Compensation                                                        |  | 36
|Item 11. |  |  | Security Ownership of Certain Beneficial Owners and Management                |  |   
|         |  |  | and Related Stockholder Matters                                               |  | 38
|Item 12. |  |  | Certain Relationships and Related Transactions, and Director Independence     |  | 40
|Item 13. |  |  | Exhibits                                                                      |  | 40
|Item 14. |  |  | Principal Accountant Fees and Services                                        |  | 43
|        
|         |  |  | Signatures                                                                    |  | 44

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FORWARD-LOOKING STATEMENTS

This report contains certain forward-looking statements and information relating to Global Aircraft Solutions, Inc. (Global) and its wholly owned subsidiaries Hamilton Aerospace Technologies Inc. ("HAT") and World Jet Corporation (World Jet) that are based on the beliefs of our management as well as assumptions made by and information currently available to our management. When used in this report, the words "anticipate", "believe", "estimate", "expect", "intend", "plan" and similar expressions, as they relate to Global, HAT, World Jet, or its management, are intended to identify forward-looking statements. These statements reflect management's current view of Global, HAT, and World Jet concerning future events and are subject to certain risks, uncertainties and assumptions, including among many others: relating to our results of operations, competitive factors, shifts in market demand, and other risks and

 uncertainties (including those described under "Risk Factors" below and elsewhere in this report), that may affect our ability to generate sufficient working capital to meet our operating requirements and service our indebtedness, our ability to refinance our secured debt, or to convert such debt to equity, maintaining good working relationships with our vendors and customers, our ability to attract and retain qualified personnel, future terrorist-related activities, economic factors that affect the aviation industry, changes in government regulation, increases in fuel prices, and the overall economy. Should any of the assumptions underlying a forward-looking statement prove incorrect, actual results could differ materially from those anticipated. We are not obligated, nor do we undertake the obligation, to revise these forward-looking statements to reflect future events or circumstances.



|PART I
|------

ITEM 1. BUSINESS.

Global is a public company that trades in the U.S. over-the-counter market. Our common stock is quoted on the OTC Bulletin Board under symbol GACF. Global was formed as a holding company to establish, maintain and administer the equity and debt funding of any acquired subsidiaries as well as maintain such capitalization of any subsidiaries.

Global subsidiaries include Hamilton Aerospace Technologies, Inc. (HAT), which was organized on April 5, 2002 and World Jet Corporation, (World Jet), which was organized on April 22, 1997. On May 2, 2002, Global acquired newly formed HAT, a Delaware corporation, in a stock-for-stock exchange. HAT was created as a provider of aircraft maintenance, repair and overhaul (MRO) services to owners and operators of Transport Category commercial jet aircraft. Its customers are all aircraft operators or owners, including passenger and cargo air carriers, and aircraft leasing companies. On July 15, 2004, (effective as of January 1, 2004), Global acquired World Jet, a privately owned Nevada corporation pursuant to a stock purchase agreement whereby Global acquired 100% of the stock of World Jet for a total purchase price of $2,050,000.00 payable as follows: 1) $1,250,000.00 in cash, 2) $300,000.00 promissory not

e, and 3) 1,000,000 shares of Global stock at a price of $0.50 per share as well as assuming all liabilities of World Jet. World Jet is an aircraft parts sales and aircraft parts brokerage facility servicing aircraft operators, aircraft leasing companies and MRO facilities.

On August 26, 2005, Global together with BCI Aircraft Leasing, (BCI), formed a joint venture Delaware limited liability company called Jetglobal, LLC, (Jetglobal). This was a special purpose LLC formed to acquire and remarket commercial jet aircraft. BCI was primarily responsible for the marketing aspects of Jetglobal while Global was responsible for the technical,repair and maintenance aspects associated with remarketing purchased aircraft. Global invested an initial amount of $1,125,000 for a 30% membership and profit interest and BCI invested an initial amount of $2,625,000 for a 70% membership interest in Jetglobal. Pursuant to the terms of Jetglobals Operating Agreement, although the Company had a 30% membership interest, it was only res

ponsible for 25% of the costs and expenses associated with Jetglobal During 2007, the Company transferred its ownership interest in Jetglobal to BCI Aircraft Leasing in consideration for aircraft inventory and trailing interest in certain Jetglobal claims against third parties. The Company and BCI executed a final agreement and a settlement on April 20, 2007, and revised  it on June 29, 2007. The terms of the final agreement with BCI did not result in any impairment to the company.

During 2006, the Company formed a Mexican corporation, Hamilton Aerospace Mexico, S. A. de C.V. for the purpose of satisfying the Mexican government requirements associated with HATs Tijuana operation and the servicing of Mexican airline, Avolar Aerolineas.

Global Aircraft Leasing Partners, LLC, a Delaware limited liability company, (GALP), is a start-up aircraft-leasing venture formed to acquire aircraft, through a combination of debt and equity financing, and lease these commercial jet aircraft to operators throughout the world. On September 4, 2007, the Company and GALP entered into an agreement that calls for the company assuming a 40% equity interest in GALP, effective October 1, 2007. Notwithstanding the effective date of the agreement, the parties have agreed that in return for marketing and technical support provided to GALP to date, the Company will be entitled to a commission equal to 40% of the net profits earned on all transactions entered into by GALP from the date of its inception through October 1, 2007. Under the terms of the agreement, in consideration for its 40% equity participation in GALP, the company will make a one time capital contribution of $40,

000. As further

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consideration the Company will provide to GALP ongoing technical support to facilitate GALPs commercial aircraft purchasing, leasing and sales activities. All technical services provided to GALP by HAT and World Jet will be billed at company-standard rates. The Company has made $20,000 in capital contribution as of December 31, 2007. Final agreement relative to operations has not yet been finalized and Global has no equity participation in GALP for the year ended December 31, 2007. Global will not be required to invest capital in aircraft acquired by GALP, and all debt assumed by GALP as a result of aircraft acquisitions will be non-recourse with respect to the Company. Other members of GALP will include equity funding specialists and aircraft leasing professionals. Global and GALP have also agreed that Global will have first right of refusal for all aircraft maintenance, aircraft parts and technical consulting requirements

 that GALP may have as a result of its aircraft acquisition and leasing activities.

During the year ended December 31, 2007, 68% of the Companys operations were conducted by two operating subsidiaries: HAT which accounted for approximately 60% of the Companys revenue and Word Jet which accounted for approximately 8% of the Companys revenue. The Companys share of Jetglobal 2007 net income was $214,800. Global contributed 32% of the Companys revenue through its aircraft-trading activity.

HAMILTON AEROPSACE TECHNOLOGIES, INC.

HAT is an aircraft repair station, licensed by the Federal Aviation Administration (FAA) and by the European Aviation Safety Agency (EASA), and is known as an "Air Agency" in FAA parlance. Its MRO services include maintenance, repair, overhaul and modification services for narrow-body Transport Category aircraft, repair and overhaul services on a wide range of aircraft components and aircraft interiors. Our major modification services include the conversion of passenger aircraft to freighter configuration and technical support for third party modification programs.

While the airlines and large leasing operators get the lion's share of attention, aircraft repair stations, such as HAT, occupy a truly pivotal role for the following reasons:

| |  |                                                                                                                       
| |  | ----------------------------------------------------------------------------------------------------------------------
| |  | First, no modification, service or repair can be made to any aircraft, nor can any parts be installed, inspected or   
| |  | certified, except by FAA-certified maintenance facilities including repair stations.                                  
| |  |                                                                                                                       
| |  | Second, aircraft require regular inspection and maintenance in accordance with FAA regulations and must               
| |  | regularly visit FAA-certified maintenance facilities including repair stations.                                       
| |  |                                                                                                                       
| |  | Third, most operators must as a matter of economics rely on repair stations to obtain parts for them, and many        
| |  | operators rely on repair stations entirely to manage their parts usage and even their line fleet.                     
| |  |                                                                                                                       
| |  | Fourth, when operator customers have parts inventories to be disposed of or planes to be torn down and parted         
| |  | out, repair stations are often called upon to do the work and find buyers for the parts.                              
| |  |                                                                                                                       
| |  | Fifth, because of their closeness to their operator customers, repair stations frequently are the first to learn of   
| |  | bargains on parts inventories and aircraft and frequently have first crack at finding a buyer or lessee for a customer
| |  | aircraft.                                                                                                             
| |  |                                                                                                                       
| |  | Sixth, repair stations can avoid many of the effects of aviation downturns because air fleets still must undergo      
| |  | scheduled maintenance irrespective of industry conditions. Even in a severe downturn when large numbers of            
| |  | aircraft are parked, aircraft storage can still be a profit center for repair stations.                               

Operations

As your jet rolls away from the gate and over the tarmac toward the runway, you may have noticed at some airports the hangars in which large commercial jets were being serviced. This is exactly what HAT does. HAT was created to provide aircraft maintenance, repair, overhaul and modification services to owners and operators of Transport Category commercial jet aircraft. Its customers are all aircraft operators or owners, including passenger and cargo air carriers and aircraft leasing companies.

When economic factors adversely affect the airline industry, they tend to reduce the overall demand for aircraft maintenance and repair services, causing downward pressure on pricing and increasing the credit risks associated with doing business within the industry. Additionally, the price of fuel affects the aircraft maintenance and repair markets, since older aircraft, which consume more fuel and which account for most of our aircraft maintenance and repair business, become less viable as the price of fuel increases. We cannot assure you that economic and other factors that have affected the airline market in the past and may affect the airline industry in the future will not adversely impact our business, financial condition or results of operations. However, since inception, HAT has aggressively increased its market share by focusing on quality service, turn ar

ound time and breadth of services offered.

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MRO Services

HAT is a full service aviation maintenance and modification repair facility that primarily performs heavy maintenance and component overhaul of large narrow body jets, such as the Boeing 727, 737, 757, DC9 and MD80 series aircraft. HAT provides airport terminal turn around maintenance for most of the airlines operating into Tucson International Airport. Below is a brief description of HATs core services:

- Routine minor and major maintenance (phase checks A, B, C and D)
- Line maintenance for carriers landing and taking off from Tucson
- International Airport Corrosion control and prevention programs
- Structural inspections
- Avionic upgrades and modifications
- Interior reconfiguration and refurbishment
- Strip and paint services to operators' livery requirements
- Comprehensive systems and structural modifications
- Flight test support
- Component overhaul
- Installation of stage 3 hush-kits (Fed Ex, Raisbeck, ABX, Nordam and Av Aero)



|Regulatory Oversight
|--------------------



|Regulation
|----------

In the United States, the Federal Aviation Administration (FAA) regulates the manufacture, repair, overhaul and operation of all aircraft and aircraft equipment operated in the U.S. pursuant to the Federal Aviation Regulations (FARs). The FAA must certify each authorized repair station, and certified facilities are issued an Air Agency Certificate. Each certificate contains ratings and limitations that specifically authorize the repair station to only perform certain types of services on specific makes and models of aircraft. FAA regulations are designed to ensure that all aircraft and aircraft equipment are continuously maintained in proper condition to ensure safe operation of the aircraft. Similar rules apply in other countries. All aircraft must be maintained under a continuous condition-monitoring program and must periodically undergo thorough inspection and maintenance. The inspection, maintenance and repair procedures for

the various types of aircraft and aircraft equipment are prescribed by regulatory authorities and can be performed only by certified repair facilities utilizing certified technicians. Certification and conformance is required prior to installation of a part on an aircraft. We closely monitor the FAA and industry trade groups in an attempt to understand how possible future regulations might impact us.

A good working relationship with the FAA is essential to the successful operation of an FAA-approved Repair Station such as HAT. The policy of HAT management is to work closely and proactively with the FAA, which has resulted in the relationship needed to insure that when significant issues do occasionally arise between HAT and the FAA they are addressed in a reasonable and constructive nature.

HAT holds FAA Air Agency Certificate #HOCR426X ("FAA Certificate") as an authorized and approved FAA repair station, which permits HAT to service narrow body large commercial jet aircraft. This certificate grants HAT the following ratings: Instrument, Accessory, Limited Airframe, and Limited Engine for the following aircraft (with certain limitations for each rating and aircraft):

RATING
     
     MANUFACTURER
     
     MAKE/MODELAirframe
     
     Boeing
     
     B-727-100-200  All seriesBoeing
     
     B-737-100-200-300-400-500  All seriesBoeing
     
     B-757  All series, LimitedDouglas
     
     DC-8  All seriesDouglas
     
     DC-9  All series


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McDonnell Douglas
     
     MD  80  All seriesPower Plant
     
     Pratt & Whitney
     
     JT  3DPratt & Whitney
     
     JT  8DGeneral Electric
     
     CFM 56


HAT is inspected regularly by the FAA for conformity to federal regulations and consistently passes those inspections with no significant discrepancies. Weekly visits by the primary maintenance inspector (PMI) from the FAA provide continuous monitoring of all HAT activities. HAT maintains a working relationship with the FAA staff and all work is carried out according to the standards and requirements of the FARs.

HAT also holds an equivalent certificate in the European Economic Community. Without the EASA certificate, HAT would not be allowed to work on aircraft that operate in European Economic Community ("EEC") airspace.

Both certificates are in good standing. Licensure and regulation of aviation companies is almost exclusively federal in nature.

Quality Assurance (which includes Quality Control and Inspection) and Production functions are separate and distinct at HAT, as required by the FAA, and the management of each is autonomous from the other, as federal law requires. Upon completion, all work will have been fully documented as to the materials used, parts and labor applied, and conformity to the approved data and FARs.

Aircraft Heavy Maintenance and Repair

Maintenance and repairs for narrow body commercial jet aircraft constitutes HAT's core business. These services include simple repairs and servicing, heavy maintenance referred to as a "C-check" and complete overhaul referred to as a "D-check." In addition, HAT performs major configuration changes of commercial aircraft, such as interior reconfiguration and conversion from passenger service to cargo service. Each airline operator has a governmental-approved and mandated maintenance schedule for each of its commercial aircraft on the line. Certain maintenance is typically performed by the operator's maintenance personnel (for example, daily line checks), while other, more substantial maintenance can be self-performed or contracted out to certified repair stations.

HAT provides services for each aircraft under aMaintenance and Service Agreement(MSA) with each operator. These contracts are generally fixed-price labor-only, with a cap on hours expended on unforeseen repairs. Parts are either provided by the operator or can be procured by HAT and resold to the operator. Delivery of the aircraft to and from HAT's facility are at the operators cost and risk, and HAT requires each operator to execute a Final Acceptance and Release which acknowledges that the services have been performed properly, that the commercial aircraft is airworthy, and which, apart from contractual warrantees, releases HAT from any financial or legal responsibility with respect to the aircraft and services. With certain long-term customers HAT has entered in

to a General Terms Agreement, which is an umbrella agreement that covers the general framework for all services HAT expects to render to the customer.

In addition to scheduled maintenance services, HAT also offers refinishing, painting and return-to-service maintenance. HAT also offers numerous related services, such as worldwide commercial aircraft pre-purchase inspection and appraisal services, post-purchase configuration, maintenance and operational program development, post-contract and post-lease condition assessment, commercial aircraft accident assessment and recovery, flight line maintenance, termination of lease recovery, and aircraft storage and storage maintenance.

Modification Services

HAT modification services include passenger to cargo conversions, engine noise suppression, power plant retrofits, and avionics upgrades to the latest in navigation, communication, and digital technology. HAT also provides interior replacement and refurbishment services as well variety of custom seating arrangements to meet operators' requirements, including all types of commercial configurations and special purpose interiors for sports teams, humanitarian missions or VIP aircraft.

HAT plans to opportunistically grow its modification services. However, HAT intends at this time to concentrate its business-building efforts on its primary maintenance services.

Market

Narrow body commercial airliners (Boeing 727s, 737s, 757s, DC9s, MD80s) are HATs primary market for selling aircraft maintenance, repair, and component overhaul services. Major commercial airlines, lower-tier airlines, package carriers, and charter operators operate these aircraft. The summer 2007 edition ofMRO Managementcites

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the industry consultancy 2007 AeroStrategy Annual Industry Forecast as projecting 3.6% annual MRO growth over the ten years from 2006 to 2016 rising from $41 billion to $58 billion, respectively. Of those numbers 14% is classified aircraft heavy maintenance, 21% modifications, 21% line maintenance, 21% component maintenance and 35% engine maintenance. HATs target market of specific narrow body commercial jet aircraft constitutes an estimated 25% of the worldwide commercial aircraft maintenance market. Due to the relatively small portion of its revenues that come from activities other than its core MRO services, HAT has not examined the markets for those other activities.

Customers and Revenue Streams

When it was first launched, HAT concentrated its marketing efforts on so-called "Tier 2" operators of older, narrow-body commercial jets, particularly Boeing 727 aircraft. HAT has expanded those efforts and now pursues both Tier 1 and Tier 2 narrow-body operators of 727, 737, 757, MD80 and DC9 aircraft.

HAT's customers include:BCI Aircraft Leasing(22%), an aircraft leasing company;Global Aircraft Leasing Partners(25%);Avolar Aerolineas, S.A. de C. .V(13%), a Mexican airline;Enterprise Aviation(5.2%);P

ratt and Whitney(3.8%);United Breweries Holding, Ltd. (5.0%);ART Portfolio(3.7%);Pegasus Aviation(1.9%), a large aircraft leasing company and long-time Hamilton Aviation customer; as well as a number of smaller customers. HAT also does line maintenance at Tucson International Airport forAlaska Airlines, American Airlines, Contintental Airlines, Delta Airlines, Frontier Ai

rlines, Jet Blue Airlines, Northwest AirlinesandUnited Airlines. HAT is working to increase and diversify its customer base and expects to sign more maintenance contracts.

Ancillary Activities and Services

In addition to its core maintenance, repair, component overhaul and modification services, HAT opportunistically generates additional income from the following revenue sources encountered in the course of the company's day-to-day business activities:

- Distress purchases:HAT is able to buy planes and parts at pennies on the dollar, re-certify parts, engines and airframes and resell them at a profit.
- Parts Sales:HAT generates revenue on all parts it installs in customer aircraft.
- Commission Sales:HAT buys parts on request for customers that don't maintain parts inventory and charges a commission for that service.
- Aircraft storage:HAT offers environmentally favorable aircraft storage to aircraft operators and has some 40 aircraft parked on its ramp for which the customers are paying both tarmac space rental and storage maintenance labor and components charges. Because it costs tens of thousands of dollars to fly them to another comparable facility, most of these aircraft will be returned to service at a cost of hundreds of thousands of dollars each in new work for HAT.
- Inspection and Certification:HAT charges a service to inspect and to re-certify parts, engines and airframes for customers.
- Aircraft Sales and Leasing Commissions:HAT takes full advantage of its position as a maintenance provider to earn commissions on aircraft sales or leases.
- Aircraft Ferry and Flight Crew Services:HAT offers aircraft ferry service and flight crew operations, to shuttle aircraft for maintenance or repositioning. Contract crews are used in order not to create additional overhead.

These other services are synergistic in that each can generate additional services and opportunities. For example, as described above HAT typically gets the maintenance and overhaul work on aircraft stored on its tarmac, due to the tens of thousands of dollars often required to relocate such aircraft. HAT also frequently gets the first offer to buy or broker aircraft due to knowledge of the industry and its ability inspect, appraise, and return the aircraft to service on a turn-key basis in accordance with the new operators specifications. These opportunities exist due to the strategic market position that aircraft repair stations, such as HAT, occupy at the center of the aviation industry.

WORLD JET CORPORATION, INC.

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Operations and Services

World Jet sells and brokers the sale of aircraft parts, airframe components, engines and engine materials including Expendables, Rotables and Consumables. Expendables are miscellaneous hardware items such as nuts, bolts, rivets, screws, etc. used as part of the aircraft part installation and service process. Rotables are serialized aircraft parts and components that are FAA certificated and tracked as FAA certified parts. Consumables are miscellaneous supplies such as sealants, grease, oil, lubricants, tape, etc. that are used and consumed in conjunction with the installation of Expendables and Rotables. World Jet brokers the sale of aircraft parts, airframe components, engines and engine materials and also maintains an inventory of its own overhauled aircraft parts, airframe components, engines and engine materials for re-sale. When brokering such materials and parts, World Jet introduces other aircraft parts sellers with

aircraft parts consumers who are in need of certain aircraft parts and receives a brokerage commission for arranging such sale. World Jet also maintains an inventory of aircraft parts, airframe components, engines and engine materials for resale that World Jet obtains from distressed companies and by purchasing aircraft and salvaging and overhauling parts removed there from.

If any parts purchased by World Jet from distressed companies or removed and salvaged from aircraft purchased by World Jet require any repairs or overhaul, World Jet out-sources such repair and/or overhaul work to an FAA approved repair and overhaul facility which must comply with FAA regulations regarding the traceability of certificated aircraft parts. World Jet services aircraft operators, aircraft leasing companies and MRO facilities such as HAT.



|Key Operational Strategies
|--------------------------

Business Philosophy

Management has rejected a policy of growth for growths sake in favor of focusing on profitability and building a good reputation for Globals operations group by limiting work contracts to those perceived to have a high probability of success, or those that are supportive of Globals aircraft trading activities. This strategy is also very beneficial to the companys marketing efforts in that a good track record of maintenance and modification contracts delivered successfully on-time and on-budget is by far the most potent tool for securing new work contracts.

The principal focus of the operations group at Global is the implementation of strategies to enhance worker productivity, which include assigning dedicated crews and dedicated project managers to each aircraft in work, ongoing training for supervisors, project managers and quality control personnel, and improving material flow to each job site.

In managing its operations, the Company is committed to continuously evaluating the adequacy of its management structure and its existing systems and procedures; including its quality control, financial, and internal controls systems. Global is focused on maintaining a small, but tightly knit and multi-tasking, highly experienced management team.



|GoalsCorporate goals are very narrow and focused. They are:
|-----------------------------------------------------------

- Maximize the profitability of the Company by identifying and developing those business opportunities that offer the highest return on investment.
- Optimize the Companys debt and capital structure.
- Cautiously build Company value through the strategic exploitation of synergistic arbitrage and acquisition opportunities.

Marketing Strategies

HAT has identified maintenance and modification of the Boeing 727, 737 and 757 and the DC-9/MD80 jet aircraft as its major target markets through at least 2008. Although aircraft maintenance is a multi-billion dollar annual industry, in many ways it is a very tightly knit community in which many key players are well known to one another. As a result, there exists a surprisingly efficient flow of information throughout the industry that makes a company's reputation by far its most important marketing asset.

The market for HATs aircraft maintenance and modification services, although global in scope, is made up of a relatively small number of aircraft owners and operators. As such, HAT does not rely on media advertising, but rather focuses its marketing efforts on building personal relationships with the aircraft owners, operators, operations managers, consultants, customer representatives and key industry vendors that make up this surprisingly tight knit international aviation community.

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World Jets marketing plan centers around building a loyal base of customers by providing quality service. World Jet strives to broaden its customer base by building inventories, through bargain purchases and securing consignment arrangements for large inventories, which provide customers with a broad range of parts availability.

While Global does provide press releases to industry trade journals, the majority of its advertising budget is spent on educating and marketing to customers and customer representatives on a face-to-face basis. Some of these meetings are made at industry trade conferences or at the customers offices. More frequently, these meetings take place in Tucson when the customer or its representative visits to inspect the Companys facilities or aircraft stored at the HAT facility. Since the most potent marketing tool available to any repair station is a good reputation for delivering aircraft back to its customers on time and on budget, much of HATs marketing really consists of maintaining good communication, performing well and otherwise making sure that each maintenance visit is an enjoyable experience for the customer and his on-site representatives or consultants.

Global regularly provides press releases on major jobs and provides interviews for trade journals as a method for maintaining visibility in the industry. Global also maintains a web site that describes its facilities, personnel and capabilities athttp://www.globalaircraftsolutions.com.



|Competition
|-----------

The barriers to entry in the commercial jet maintenance and modification business are very high due to the stringency of FAA regulation, the complexity and sophistication of modern jet aircraft, and the reluctance of operators to entrust their aircraft maintenance to new, unproven start-up facilities. Even if a new entrant succeeds in completing the very costly and time consuming process of obtaining FAA approval for a new repair station, they are then faced with the difficult task of convincing operators to input aircraft into an unproven facility that may experience learning curve cost overruns and delays.

Given the many billions of aircraft maintenance dollars spent each year, and the relatively limited number of approved repair stations, much of the meaningful competition in today's aircraft maintenance industry is not so much competition for customers as it is for qualified personnel to perform the work. In view of the importance of employing highly competent personnel in the quality critical field of commercial aircraft maintenance, HAT's pay scales generally meet or exceed national standards. Also, HAT has been very successful in recruiting key personnel by focusing on providing a good quality work environment and due to the desirability of Tucson's lifestyle.

In the local area, HAT's major competitor for narrow-body aircraft maintenance work is Evergreen Air Center, which is located in Marana, Arizona and employs approximately 500 people. Evergreen Air Center services Evergreen Airline's fleet of Boeing 747 and McDonnell Douglas DC-9 commercial aircraft and provides services to outside customers. Nationally, HAT competes in the narrow-body segment of the market with Tramco, owned by Goodrich Corporation and located in Seattle, Washington; AAR Group, Inc., located in Oklahoma City, Oklahoma; Mobile Aerospace, located in Mobile, Alabama; Timco, located in Greensboro, North Carolina, Macon, Georgia and Lake City, Florida; and FlightStar, located in Jacksonville, Florida. Internationally, HAT competes with Coopesa, located in San Jose, Costa Rica and Aeromar, part of the Taca Groupa, located in San Salvador, El Salvador.

Because World Jet is a parts broker, the most significant determiner of competitive advantage for World Jet is parts availability. Major parts brokers competing in the marketplace with World Jet include: Pac Air Industries, Unical Aviation, Pacific Air Industries, Volvo Aero, Aero Controls, AAR-Allen Aircraft, Kellstrom Industries, Broward Aviation, Memphis Group, ABX-Air, A.J. Walter, Turbo Resources, Jet Accessory Center, Aero Inventory-UK, American Jet Industries, Continental A/L and Wencor West.

Operations Strategies

Through experience, the management team at HAT has learned that, in the aircraft maintenance business, taking on too much work results in reduced profit margins, dissatisfied customers and, ultimately, the loss of future business. On the other hand, limiting work contracts to the number and type that can be performed effectively results in improved profit margins and increased future business opportunities.

Also, for budgetary purposes, most aircraft maintenance customers today prefer fixed-bid contracts on their scheduled maintenance checks. This offers efficient well-managed repair stations the opportunity to significantly improve their profit margins, while still maintaining customer satisfaction.

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By maintaining small, tightly knit work crews, retaining experienced crew chiefs and carefully screening work contracts, HAT has found that it can routinely come under budget on scheduled aircraft maintenance contracts fix-priced at rates widely accepted by the industry. Accordingly, while mindful of the need for long-term growth by the Company, Management is presently focused on pursuing a strategy of maximizing operations profitability and customer satisfaction rather than rapid growth.

Financial Strategies

The principle financial strategy of Global is to secure debt financing sufficient to insure the efficient day-to-day operation of the HAT and World Jet facilities and enable the Company to provide reasonable payment terms to creditworthy customers. Management is also interested in securing additional funding for the purpose of certain productivity-improving or synergistic acquisitions and other asset-based business opportunities.

Business Development Strategies

As described inOperations Strategiesabove, Management is, for the foreseeable future, taking a conservative approach to growing the core aircraft maintenance services business and is focusing aggressively on seeking to increase operating profit margins and customer satisfaction. In practical terms, this translates into annual sales revenue growth rates of no more than 20% in the Companys core aircraft maintenance business and greater management focus on growing the less labor-intensive and higher-margin aircraft trading and aircraft parts sales segments of the Company. Our goal is a growth rate in both the aircraft trading and parts sales side of the business in the range of at least 10% to 25% per year over at least the next two years.

Distressed aviation assets often come to the attention of HAT, as a maintenance service provider and aircraft storage facility, prior to becoming known to the market at large. Frequently, such assets can be placed with end-users known to HAT. These arbitrage opportunities can involve distressed parts inventories, distressed aircraft that can be torn-down for parts, or distressed aircraft that can be purchased, repaired and sold or leased at a profit. These types of arbitrage opportunities annually represent potentially tens of millions of dollars of additional lucrative potential business available to HAT. As Global gains more access to capital from outside sources or as a result of Company operating profits, management anticipates the revenue to Global from these types of opportunistic arbitrage transactions may become a significant portion of Globals future growth.

The large aircraft repair business is highly competitive. Revenues are sensitive to adverse changes in the air carrier business. The heavily regulated airline industry, however, requires scheduled maintenance and repair services irrespective of industry economics, thus providing a reasonably steady market for HAT's services and for World Jets parts. HAT competes principally on the high quality of its services, its price competitiveness due to its location in the Southwest with its dry, mild climate and ability to do many MRO projects outdoors, and the low cost of its Tucson facility. World Jet competes on parts availability, time of delivery, and competitive pricing.



|Employees and Employment
|------------------------

At December 31, 2007, a total of approximately 112 employees were employed by HAT, 20 of which performed administrative functions. World Jet had approximately 20 employees consisting of sales staff and administrative personnel. Global had a staff of 6.

All employees are highly trained and qualified. During the last quarter of 2003, a reassessment of the HAT business plan resulted in the decision to employ a work force whose number would be adequate to handle the workflow without downtime in slower periods. This decision was focused on increased efficiency and profitability. The employment capacity of the facilities currently occupied by HAT is estimated to be at least up to 500 fulltime employees working two staggered shifts, which allows for considerable growth in the future. Global, World Jet and HAT are non-union and believe that their relationships with employees are good. HAT's management is also experienced in the hiring, training, and retention of people necessary to operate its repair, maintenance and modification facilities.

Based upon the available talent pool, Global, World Jet, and HAT believe that their needs for labor will be addressed in the future. This includes the key technical positions that require licensure by the FAA. The Company does not expect that identifying; attracting and retaining qualified personnel in any of the key areas will be difficult.

In addition, Pima Community College, located in Tucson, has been training mechanics since 1991. Pima operates a major new training facility adjacent to HAT's facility. HAT works closely with Pima to apprentice new Pima students to work at HAT and to hire experienced Pima alumni.

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Due to complexity of aircraft maintenance operations, it is essential that HAT employ highly experienced and highly competent people in key management positions. This is necessary both to attract and keep business and to maintain HAT's good standing with the FAA. Accordingly, HAT has found it most cost effective to attract and keep key personnel by offering attractive salaries, while aggressively replacing those key employees who, after given a reasonable opportunity to do so, fail to successfully meet their job requirements. The critical public safety issues associated with commercial aircraft maintenance require that HAT quickly identify and address any shortcomings in the oversight of its activities.

Similarly, in an industry where aircraft down time represents tens of thousands of dollars a day in lost revenue, and a misdrilled hole or a bolt left in an engine inlet can cost tens of thousands of dollars to address, HAT has found it most cost effective to pay its production personnel wages at the higher end of national standards while demanding in return a high level of professionalism from its employees. To insure that a good level of communication is maintained with all employees, HAT provides regular written evaluations to all employees.



|Product liability
|-----------------

Our business exposes us to possible claims for personal injury or death, which may result from the failure of an aircraft or an aircraft part repaired or maintained by us or from our negligence in the repair or maintenance of an aircraft or an aircraft part. While HAT maintains what we believe to be adequate liability insurance to protect us from claims of this type, based on our review of the insurance coverage maintained by similar companies in our industry, we cannot assure you that claims will not arise in the future or that our insurance coverage will be adequate. Additionally, there can be no assurance that insurance coverage can be maintained in the future at an acceptable cost. Any liability of this type not covered by insurance could materially adversely affect our business, financial condition, results of operations or ability to operate as a going concern.



|Industry Overview
|-----------------

As is the case in most industries, the aviation industry is cyclical in nature. Historical evidence suggests that the typical business cycle in the aviation industry has duration of approximately 10 years peak to peak. The recession in the aviation industry which was triggered by terrorist activity seems to have bottomed out and the industry is rebounding evidenced by aSpeedNewsreport that the past two years shows the first consecutive years profit for U.S. Airlines since 1999-2000. We believe that the following trends are currently affecting the aviation industry and our operations in particular:

National Economy

The national economy appears to be trending towards recession. If this trend continues, then within two years or less, it will materially effect our business, with aircraft being withdrawn from service by the major airlines and becoming available in the secondary market. This gives rise to potential opportunity for the Company, in both aircraft trading and heavy maintenance return-to-service work.

Growth in the Market for Aircraft MRO Services

The summer 2007 edition ofMRO Managementcites the industry consultancy 2007 AeroStrategy Annual Industry Forecast as projecting 3.6% annual MRO growth over the ten years from 2006 to 2016 rising from $41 billion to $58 billion, respectively. Of those numbers 14% is classified aircraft heavy maintenance, 21% modifications, 21% line maintenance, 21% component maintenance and 35% engine maintenance. HATs target market of specific narrow body commercial jet aircraft constitutes an estimated 25% of the worldwide commercial aircraft maintenance market.

We anticipate that these factors will in the long term increase the demand for maintenance and repair services. Based on this and other data, HAT estimates the worldwide market for MRO services in 2008 at over $40 billion annually and that approximately $5 billion of that amount will be provided in North America. We believe airlines perform approximately well over half of the North American services and that the balance is performed by independent facilities such as HAT.

Diversified Services and Strong Competitive Position

Our services include a wide range of aircraft maintenance and repair services across a number of different airframes. The breadth of our services allows us to be a vendor of choice to our customers in a highly fragmented industry. HAT competes principally on the high quality of its services, its price competitiveness due to its location in the Southwest with its dry, mild climate that allows services to be performed with only rare weather interruptions and to do much of its service out of doors, and the low cost of its Tucson facility.

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Emphasis on Quality

The FAA and EASA license our MRO facility. We emphasize quality and on-time delivery to our customers. We are focused on meeting and exceeding FAA and EASA requirements. As industry, regulatory and public awareness have focused on safety, our ability to meet and exceed these requirements on a consistent basis has become important to customers.

ITEM 1A. RISK FACTORS

In addition to the other information contained in or incorporated by reference into this Form 10-K, you should carefully consider the following risk factors and other information contained in this report.

Problems in the Airline Industry

Problems in the airline industry could adversely affect our business. Since our customers consist primarily of passenger and cargo air carriers and aircraft leasing companies, the threat of terrorist activities continues to adversely impact the airline industry and consequently adversely impact our business. However, it does affect our business to a much lesser extent than it affects MRO firms that rely heavily on major airlines for business. When economic factors adversely affect the airline industry, they tend to reduce the overall demand for maintenance and repair services, causing downward pressure on pricing and increasing the credit risks associated with doing business with airlines. We cannot assure you that economic and other factors, which may affect the airline industry, will not adversely impact our business, financial condition or results of operations. Such adverse effects in the airline industry, can also adversely

affect our aircraft parts sales business conducted by our wholly owned subsidiary, World Jet. Any event or occurrence that adversely impacts the aircraft maintenance industry will also adversely impact the aircraft parts sales industry because aircraft parts sales are directly related to the demand for maintenance of aircraft.

Increasing Cost of Jet Fuel

The trend in the market towards increasing jet fuel prices may adversely affect our business. The price of jet fuel affects the maintenance and repair markets, since older aircraft, which consume more fuel and which account for most of our maintenance and repair services business, become less viable as the price of fuel increases.

Terrorist Attacks

The continuing threat of terrorism has had a negative impact on the airline industry in general, and thereby indirectly on us. Factors arising (directly or indirectly) from these terrorist attacks which could affect our business may include: (i) the impact of these terrorist attacks and the impact in declines in air travel as a result of these terrorist attacks on the financial condition of one or more of our airline customers, (ii) possible increases in jet fuel prices as a result of events relating to these terrorist attacks, (iii) potential reductions in the need for aircraft maintenance due to declines in airline travel and cargo business and (iv) the adverse effect these terrorist attacks, or future events arising as a result of these terrorist attacks, on the economy in general.

Aviation Industry is Subject to Heavy Government Regulation

In the United States, the Federal Aviation Administration (FAA) regulates the manufacture, repair, overhaul and operation of all aircraft and aircraft equipment operated in the U.S. pursuant to the Federal Aviation Regulations (FARs). The FAA must certify each authorized repair station, and certified facilities are issued an Air Agency Certificate. Each certificate contains ratings and limitations that specifically authorize the repair station to only perform certain types of services on specific makes and models of aircraft. FAA regulations are designed to ensure that all aircraft and aircraft equipment are continuously maintained in proper condition to ensure safe operation of the aircraft. Similar rules apply in other countries. All aircraft must be maintained under a continuous condition-monitoring program and must periodically undergo thorough inspection and maintenance. The inspection, maintenance and repair procedures for

the various types of aircraft and aircraft equipment are prescribed by regulatory authorities and can be performed only by certified repair facilities utilizing certified technicians. Certification and conformance is required prior to installation of a part on an aircraft. We closely monitor the FAA and industry trade groups in an attempt to understand how possible future regulations might impact us.

There is no assurance that new and more stringent government regulations will not be adopted in the future or that any such new regulations, if enacted, will not materially adversely affect our business, financial condition or results of operations. Further, our operations are also subject to a variety of worker and community safety laws. In the United States, the Occupational Safety and Health Act mandates general requirements for safe workplaces for all employees. Specific safety standards have been promulgated for workplaces engaged in the treatment, disposal or storage of hazardous waste. We believe that our operations are in material compliance with health and safety requirements under the Occupational Safety and Health Act. There is no assurance that the company will retain current regulatory agency certifications or be able to obtain future required regulatory agency certifications.

Dependence on a Small Number of Customers

For the year ended December 31, 2007, our largest continuing customer accounted for 46.5% of our revenue. Three customers accounted for 76.9% or our revenue. These results were impacted by a one-time aircraft sale to one customer of $7.85 million, which represents 31.7% of revenue. We recognize that any customer concentration

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creates risks and efforts are continually being made to broaden and strengthen our customer base. While the relative significance of customers varies from period to period, the loss of, or significant curtailments of purchase of our services by, one or more of our significant customers at any time could adversely affect our revenue and cash flow. The customers upon whom the Company subsidiaries relied for 10% or more of their revenue during the year ending December 31, 2007 are as follows:

|                           |  |                       |  |  |                        |  |                       | 
|-------------------------- |  | --------------------- |  |  | ---------------------- |  | --------------------- | 
|HAT                        |  |                       |  |  | WORLD JET              |  |                       | 
|Customer                   |  | Percentage of Revenue |  |  | Customer               |  | Percentage of Revenue | 
|                           |  |                       |  |  |                        |  |                       | 
|BCI Aircraft Leasing, Inc. |  | 30.4%                 |  |  | HAT                    |  | 60.4%                 | 
|GALP                       |  | 24.6%                 |  |  | Total Aircraft Support |  | 1.9%                  | 

HAT was World Jets largest customer for the year ended December 31, 2007, accounting for 60.4% of World Jets revenue. Since HAT and World Jet now operate as wholly owned subsidiaries of Global, any significant adverse events that affect HAT and Global will also adversely impact World Jet. Likewise, any significant curtailment in purchases of aircraft parts by one or more of World Jets significant customers could adversely affect World Jets revenues and cash flow.

Inability to collect significant accounts receivable

During 2006, Avolars increasing fleet size resulted in increasing receivables due HAT. At the same time, Avolars past due receivables increased significantly. In order to protect the Companys financial status, in February 2006 Management put Avolar on a COD basis and negotiated a schedule for Avolar to bring its account current. The parties also agreed that Avolar would obtain whatever services and credit it could from other maintenance service providers in order to facilitate Avolars pay-down of monies due HAT. By the end of 2007, Avolar had made progress reducing the amount owed HAT, but Avolar is not in full compliance with the terms of its payment schedule agreed to with HAT. Avolar has stated its intention to bring its accounts current with HAT and World Jet and renew its maintenance and support agreements with both companies.

By the end of the fourth quarter 2006 and into the first quarter 2007 the past due amounts due HAT by BCI Aircraft Leasing, Inc. had also reached unacceptable levels. Additionally, BCI had failed to provide information legally demanded by the Company regarding the financial results of its joint venture with BCI, Jetglobal. On April 20, 2007 the Company entered into a settlement agreement with Jetglobal and BCI wherein in consideration for the Companys 30% ownership interest in Jetglobal, the Company received title, free and clear, to five aircraft valued at $1,500,000 each. A sixth aircraft purchased from Global by Jetglobal, and which had MRO work performed by HAT, was returned to the Company in satisfaction of money due to the Company, $1,150,000 for that particular aircraft. The Company also retains a trailing interest of 18% of any amount paid Jetglobal under (i) satisfaction of the claim against Delta and (ii) the Jetg

lobal claim against AFG for breach of contract.

Lease of Property

Globals wholly owned subsidiary, HAT, is currently conducting operations on leased property at the Tucson International Airport, (TIA). Currently, World Jet is also occupying space under this same lease. The lease is a one-year lease commencing March 1, 2005 and permits HAT to apply for two additional one-year options. We are in the second year of additional two years of option to renew. The rent has been paid current to date. TIA is implementing a Master Plan for airport development, which precludes issuing a long-term lease to HAT, but should not affect HATs facilities for at least five years. Until HAT possesses a long-term lease there remains a risk that HAT will have to relocate operations, which could have an adverse impact on HATs operations.

Risk of Operating in One Location

During 2007, Global conducted more than 68% of its operations through its two wholly owned subsidiaries, HAT and World Jet. HAT has been located at 6901 South Park Avenue, Tucson, Arizona since its inception. During the fourth quarter of 2006, World Jet relocated its sales offices to facilities at this HAT site. World Jet serves as HATs parts supply facility for aircraft parts and stores its inventory at 7001 South Park Avenue, Tucson, Arizona. During 2007, World Jet accounted for 8% of Globals total revenue. The repair and maintenance operation of HAT comprised 60% of Globals revenue. By having only one location for aircraft repair and maintenance for HAT and sales offices for World Jet both are at risk of temporary or permanent cessation of all operations should they encounter an event which renders the facility unusable for any period of time or either encounters any issues or problems related to the use of t

he facility at this location.

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World Jet stores its inventory in only one location in Tucson, Arizona at 7001 South Park. Cessation of operation at this location due to events, which render the facility unusable for any period of time or any damage to or destruction of this facility and/or the inventory, will also adversely impact the Company.

Reliance on Executive Officers and Key Employees

Our continued success depends significantly upon the services of our executive officers and upon our ability to attract and retain qualified personnel in all of our operations. While we have issued employment agreements with each of our executive officers and certain of our key employees, most of our employees are employed on an at-will basis. The loss of one or more of our executive officers and of a significant number of our other employees without capable replacements could materially adversely affect our business, financial condition or results of operations.

Competition

The airline industry and the markets for our products and services are extremely competitive, and we face competition from a number of sources. Our competitors are other companies providing MRO services. Certain of our competitors have in the past responded to market competition and conditions by reducing prices on their services to increase or retain market share. Any material deterioration in our financial condition is likely to affect our ability to compete with price-cutting by our competitors. Some of our competitors have substantially greater financial and other resources than us. We cannot assure you that competitive pressures will not materially adversely affect our business, financial condition or results of operations.

Product Liability

Our business exposes us to possible claims for personal injury or death, which may result from the failure of an aircraft or an aircraft part repaired or maintained by us or from our negligence in the repair or maintenance of an aircraft or an aircraft part. While the Company maintains what we believe to be adequate liability insurance to protect us from claims of this type, we cannot assure you that claims will not arise in the future or that our insurance coverage will be adequate. Additionally, there can be no assurance that insurance coverage can be maintained in the future at an acceptable cost. Any liability of this type not covered by insurance could materially adversely affect our business, financial condition, results of operations or our ability to continue as a going concern.

Susceptibility to Other Liability Claims

Our business exposes us to possible claims for personal injury or death, which may result if we were negligent in repairing or overhauling an airplane. We cannot assure you that claims will not arise in the future or that our insurance coverage will be adequate to protect us in all circumstances. Additionally, we cannot assure you that we will be able to maintain adequate insurance coverage in the future at an acceptable cost. Any liability claim not covered by adequate insurance could materially adversely affect our business, financial condition or results of operations.



|ITEM 1B.    UNRESOLVED STAFF COMMENTS.None.
|-------------------------------------------

ITEM 2.    PROPERTIES.

The principal executive offices for Global are located at 6901 South Park Avenue, currently some executive offices are now at 6451 South Country Club Road, Suite 111 about one mile from the HAT and World Jet operational areas. The principal executive offices for HAT and World Jet are located at the HAT hangar facilities in Tucson, Arizona at Tucson International Airport. This favorable location provides 360 days of sunshine per year together with extremely low humidity year round. These facilities are situated on the northwest ramp on 22 acres of concrete within the airport proper and are patrolled by the Tucson Airport Authority police force. HAT leases these facilities at a rental rate of $25,650 per month.

The HAT facility is level and fully paved with concrete sufficient to handle the largest aircraft on any part of its 22 acres. Two hangars provide the space for any modification and maintenance work that must be performed indoors. The larger hanger has 180' clear span and is 185' deep (30,400 sq. ft.), enabling it to wholly enclose a DC9 and a 727 at the same time. The hangar has been modified to serve as a paint booth as needed.

The smaller hangar is 100 clear span by 100 deep (10,000 sq. ft.) with 2,000 square feet of office space on the north side and another 4,000 square feet of enclosed space on the south. Offices for HAT production planning and control operations are in this area, as is engineering, the welding shop, receiving, materials and purchasing departments. The two hangars face each other at a distance of approximately 220 feet. Numerous mobile offices have been added to provide additional space for HAT and World Jet administrative and customer representative offices.

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To the southeast of the large hangar is a 12,000 foot covered building used to store aircraft components and maintenance equipment. A 9,000 square foot warehouse on the west side of the facility houses the interior department as well as additional storage for materials and records. Both main hangars are equipped with lighting, water, compressed air, and 115/220/440 volt AC electricity. All office spaces are heated and cooled.

During the fourth quarter of 2006, World Jet moved its entire inventory into 59,000 square feet, adjacent to the HAT complex, which World Jet is leasing for the purpose of inventory storage.

ITEM 3.    LEGAL PROCEEDINGS. 
Global

As Plaintiff:

On June 29, 2004, the Company initiated a lawsuit against Corwin Foster and Jane Doe Foster, husband and wife, and Seajay Holdings, LLC a Michigan Limited Liability Company (the Defendants) in the United States District Court for the District of Arizona requesting entry of a judgment for the return of 1,500,000 shares of common stock. Global and HAT have asserted claims that Corwin Foster (who is the sole shareholder and president of Seajay Holdings) and Seajay Holdings acquired 1,500,000 shares of common stock of Global as part of a Stock Exchange Agreement without consideration for the receipt of such common stock. The Company is pursuing the return of these shares. This lawsuit emanates from a stock exchange agreement of April 2002 whereby Old Mission Assessment (OMAC) agreed to provide HAT financing and capital for its newly established business. OMAC and its officers Corwin Foster and others, entered

into two debenture related agreements on April 15, 2002 whereby OMAC agreed to pay to HAT the sum of $1,500,000 under each debenture agreement on or before July 15, 2002. In consideration of this agreement HAT agreed to provide to various investing parties, including Corwin Fosters entity Seajay Holdings, shares of stock of HAT. On May 2, 2002, Global acquired HAT in a stock exchange thereby entitling the investing parties, including Corwin Fosters entity Seajay Holdings, to Global stock in consideration for the $3,000,000 investment. Seajay Holdings acquired 1,500,000 shares of common stock of Global pursuant to this transaction. Although Global stock was issued to the investors, including Corwin Fosters entity Seajay Holdings, HAT/Global only received $400,535 of the agreed upon $3,000,000 to be paid pursuant to the debenture agreements. Since payment in full was never received by Global for the shares of common stock issued as consideration for the debenture agreements, Global was able t

o secure the return of all common stock issued in connection with the debenture agreements except the 1,500,000 shares of common stock issued to Corwin Fosters entity Seajay Holdings. Global agreed to return the $400,535 of the agreed upon $3,000,000 received pursuant to the debenture agreements. This sum was released from escrow and paid to United Pay Phone, an investor in OMAC, pursuant to an agreed upon order of the court.

Although Global has made repeated demands upon Corwin Foster and Seajay Holdings to return the 1,500,000 shares of common stock, Corwin Foster and Seajay Holdings have failed and refused to return such stock. As a consequence of Corwin Fosters and Seajay Holdings failure to return the common stock received, Global initiated legal proceedings for damages in the amount of no less than $1,000,000 plus interest and fees; the return of the 1,500,000 shares of common stock; and punitive damages in the amount of $10,000,000.

On or about July 24, 2006, which was far beyond the procedurally acceptable time within which to file a counterclaim and without the required leave of court, Corwin Foster filed a counterclaim against Global, HAT, Hamilton Aviation, Ian Herman, Gordon Hamilton, John Sawyer, Ronald Clark, Frank Hooper, United Payphone, Financial Capital, Interwest Transfer and the law offices of Tharpe Howell alleging fraud, unjust enrichment, breach of contract and constructive trust.

All of these claims are categorically denied.

Globals Motion for Summary Judgment was dismissed in June 2007 and the matter is expected to proceed to trial in early 2008.

On June 6, 2007, HAT was served with a civil complaint filed by Petro Energy Corporation in the Superior Court of California. The Complaint alleges that Petro Energy and HAT entered into a fuel services agreement and that HAT has failed to pay a total of $155,177 pursuant to the terms of the fuel services agreement. The Complaint further alleges that John Sawyer and HAT also owe Petro Energy $60,000 for fuel services provided to Falcon Air and $17.5 million for fuel services provided to Avolar Airlines.

The $60,000 claim was paid by Falcon Air to Petro Energy on June 20, 2007.

During February 2008, HAT agreed to pay $179,277 for full and final settlement of the fuel claim and the $17.5 million claim for fuel services provided to Avolar was withdrawn and dismissed with prejudice.

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In re Falcon Air Express, Inc. United States Bankruptcy Court, Southern District of Floridawherein the Trustee of the Bankruptcy Court has asserted a preference under Section 547 of the Bankruptcy Code against HAT in the amount of $682,931 for payments received by HAT within 90 days of the Debtor Falcon filing for Bankruptcy under Chapter 11 of the Bankruptcy Code. HAT has asserted an exception to application of any preference as follows:

a)
     
     Exception to preferences under Section 547 (c) (1)  Transfer was made to be a contemporaneous exchange for new value;b)
     
     Exception to preferences under Section 547 (c) (2)  Payments made in the ordinary course of business; andc)
     
     Exception to preferences under Section 547 (c) (4)  Extension of new credit to the debtor, the value of which offsets any preference claim.




|This matter is currently pending discovery.HATAs Plaintiff:
|-----------------------------------------------------------

On November 13,2006, HAT commenced a civil action in the Superior Court of Arizona against Admiral Merchants Motor Freight, Inc., vital Express, et al, to recover damages to an aircraft engine that the defendants were contracted to transport from HATs maintenance facility in Tucson to a facility in Vancouver, B.C. HAT is alleging that the Defendants did not properly secure the engine during transport, thereby causing damage to the engine which resulted in approximately $588,127.00 in damages to HAT. The claim has been removed to the Federal District Court in Arizona and is currently pending discovery. A settlement agreement was reached in this matter in February 2008. The agreement stipulates that the Company will receive $200,000 within 30 days of said settlement. (See Subsequent Eventsin the Notes to the Financial Statements included in this filing).



|World JetWorld Jet is not involved in any material legal proceedings.
|---------------------------------------------------------------------

There is no pending or threatened governmental or regulatory action against Global or any of its subsidiaries.

ITEM 4.    SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.

There were no matters submitted to a vote of shareholders during the fourth quarter of the year ended December 31, 2007.

ITEM 5.    MARKET FOR THE REGISTRANT'S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES.



|Price Range of Common Stock
|---------------------------

During the fiscal year ended December 31, 2003 through October 26, 2004, the National Association of Securities Dealers, Inc, quoted the Common Shares under symbol RDVN on the OTC Bulletin Board maintained. Subsequent to October 26, 2004, as the result of the Companys name change to Global Aircraft Solutions, Inc. the common shares were quoted under the symbol GACF at that same location. The following information relates to the trading of our common stock, par value $.001 per share. The high and low last sales prices of our common stock for each quarter during our two most recent fiscal years, as reported by the OTC Bulletin Board to date, are set forth below:

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|     |  |                |  |       |  |      
|---- |  | -------------- |  | ----- |  | -----
|     |  |                |  | HIGH  |  | LOW  
|2007 |  |                |  |       |  |      
|     |  | First Quarter  |  | $1.15 |  | $0.54
|     |  | Second Quarter |  | $0.85 |  | $0.54
|     |  | Third Quarter  |  | $0.85 |  | $0.70
|     |  | Fourth Quarter |  | $0.74 |  | $0.32
|    
|2006 |  |                |  |       |  |      
|     |  | First Quarter  |  | $1.73 |  | $1.37
|     |  | Second Quarter |  | $1.66 |  | $1.15
|     |  | Third Quarter  |  | $1.41 |  | $0.98
|     |  | Fourth Quarter |  | $1.18 |  | $0.93

Impact of Being an OTC Bulletin Board Stock

Globals common stock is quoted on the OTC Bulletin Board and is traded in the over-the-counter markets. As long as the price of our common shares is under $5.00, we may at any time be subject to the "penny stock" provisions of the Exchange Act and applicable SEC rules. In that event, our common stock will be subject to rules that impose additional sales practices on broker-dealers who sell our securities. For transactions covered by the penny stock rules, the broker-dealer must make a suitability determination for each purchaser and receive the purchaser's written agreement prior to the sale. In addition, the broker-dealer must make certain mandated disclosures in penny stock transactions, including the actual sale or purchase price and actual bid and offer quotations, the compensation to be received by the broker-dealer and certain associated persons, and deliver certain disclosures required by the SEC. So long as Global's

 common shares are considered "penny stocks", many brokers will be reluctant or will refuse to effect transactions in Global's shares, and many lending institutions will not permit the use of penny stocks as collateral for any loans. This could have an adverse effect on the liquidity of our common stock.

Our Common Stock is Thinly Traded and Our Stock Price May be More Volatile than the Market in General

Because our common stock is thinly traded, its market price may fluctuate significantly more than the stock market in general or the stock prices of similar companies, which are exchanged, listed or quoted on NASDAQ. Our public float is approximately 31,259,930 shares, thus our common stock will be less liquid than the stock of companies with broader public ownership, and, as a result, the trading prices for our common stock may be more volatile. Among other things, trading of a relatively small volume of our common stock may have a greater impact on the trading price for our stock than would be the case if our public float were larger.



|Holders
|-------

Global had approximately 62 shareholders of record as of December 31, 2007, which number does not include shareholders whose shares are held in street or nominee names. We believe there are at least 500 beneficial holders of our common stock.



|Dividends
|---------

Since becoming a public company in September of 1997, Global has never paid a dividend and does not expect to pay a cash dividend upon its capital stock in the foreseeable future. Payment of dividends in the future will depend on our earnings (if any) and our cash requirements at that time, but we expect to retain earnings for business expansion over the foreseeable future.

RECENT SALES OF UNREGISTERED SECURITIES

On May 31, 2004, the shareholders authorized the issuance of 9,600,000 shares of common stock pursuant to a private placement to accredited investor Barron Partners, LP as well as the issuance of two (2) warrants to Barron Partners, LP representing 7,200,000 underlying shares of common stock each; one warrant with an exercise price of $.68 per share and the second warrant having an exercise price of $1.36 per share. On or about July 27, 2005, Barron Partners, LP received 7,200,000 shares of common stock pursuant to the exercise of the $.68 warrant. Barron Partners, LP continues to hold the remaining $1.36 warrant with 7,200,000 underlying shares of common stock. In connection with this private placement to Barron Partners, LP, the Company also issued three (3) warrants pursuant to a private placement to accredited investor to JG Capital, Inc. representing 1,800,000 total underlying shares of common stock; one warrant with an exer

cise price of $.34 per share for 720,000 underlying shares of common stock; the second warrant having an exercise price of $.68 with 540,000 underlying shares of common stock; and the third warrant having an exercise price of $1.36 with

17

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540,000 underlying shares of common stock. However, all three warrants contain a cashless exercise feature entitling the holder thereof to a discounted number of shares should such cashless exercise feature be implemented. On or about September 20, 2005, JG Capital, Inc. exercised 501,000 of 720,000 shares of common stock underlying the $.34 warrant on a cashless basis and received a discounted share issuance of 399,000 shares of common stock and a new $.34 warrant with 219,000 underlying shares of common stock. On or about May 9, 2006, JG Capital exercised the balance of shares underlying this $.34 warrant again on a cashless basis and received a discounted share issuance of 165,814 shares of common stock. In issuing these shares of common stock and the shares of common stock underlying the warrants, the Company relied upon Section 4(2) of Securities Act of 1933, as amended (the "Act"). The Company issued the 9,600,000 shares of

 common stock and the warrants representing 16,200,000 underlying shares of common stock pursuant to an exemption from registration under Regulation D, Rule 506.

On June 15, 2004, the shareholders authorized the issuance of 1,000,000 shares of common stock pursuant to a private placement to accredited investor, Ralph Garcia as partial compensation in connection with the purchase of World Jet. The Company relied upon Section 4(2) of Securities Act of 1933, as amended (the "Act"). The Company issued the 1,000,000 shares of common stock pursuant to an exemption from registration under Regulation D, Rule 506.

On August 15, 2004, the shareholders authorized the issuance of 2,115,386 shares of common stock pursuant to a private placement to accredited investors, Alpha Capital, Stonestreet, Whalehaven and Greenwich as well as the issuance of the following shares of common stock underlying warrants: (i) Alpha Capital  625,000 shares of common stock underlying a $1.00 warrant and 625,000 shares of common stock underlying a $1.36 warrant; (ii) Stonestreet  192,308 shares of common stock underlying a $1.00 warrant and 192,308 shares of common stock underlying a $1.36 warrant; (iii) Whalehaven  144,231 shares of common stock underlying a $1.00 warrant and 144,231 shares of common stock underlying a $1.36 warrant; (iv) Greenwich  96,154 shares of common stock underlying a $1.00 warrant and 96,154 shares of common stock underlying a $1.36 warrant. (Greenwich having exercised the $1.00 warrant on or about March 30, 2006);

 (v) JG Capital, Inc.  95,192 shares of common stock underlying a $.52 warrant, 47,597 shares of common stock underlying a $1.00 warrant, and 47,597 shares of common stock underlying a $1.36 warrant; (vi) Heza Holdings  31,731 shares of common stock underlying a shares of common stock underlying a $.52 warrant, 15,865 shares of common stock underlying a $1.00 warrant, and 15,865 shares of common stock underlying a $1.36 warrant. (Heza Holdings having exercised the $.52 warrant on a cashless basis thereby receiving a discounted share issuance of 21,017 shares of common stock on or about December 27, 2005); and (vii) Grushko & Mittman PC  31,731 shares of common stock underlying a shares of common stock underlying a $.52 warrant, 15,865 shares of common stock underlying a $1.00 warrant, and 15,865 shares of common stock underlying a $1.36 warrant. (Grushko & Mittman having exercised the $.52 warrant on a cashless basis thereby receiving a discounted share issuance of 22,812 shares of

common stock on or about September 14, 2005). In issuing these shares of common stock and the shares of common stock underlying the warrants, the Company relied upon Section 4(2) of Securities Act of 1933, as amended (the "Act"). The Company issued the 2,115,386 shares of common stock and the warrants representing 2,354,954 underlying shares of common stock pursuant to an exemption from registration under Regulation D, Rule 506.

The Company relied upon Section 4(2) of the Securities Act of1933, as amended (the "Act"). Each prospective investor was given a private placement memorandum designed to disclose all material aspects of an investment in the Company, including the business, management, offering details, risk factors and financial statements. Each investor also completed a subscription confirmation letter and private placement subscription agreement whereby the investors certified that they were purchasing the shares for their own accounts, with investment intent and that each investor was either "accredited", or were "sophisticated" purchasers, having prior investment experience or education, and having adequate and reasonable opportunity and access to any corporate information necessary to make an informed investment decision. This offering was not accompanied by general advertisement or general solicitation and the shares were issued with a Rule

 144 restrictive legend.

Under the Securities Act of 1933, all sales of an issuers securities or by a shareholder, must either be made (i) pursuant to an effective registration statement filed with the SEC, or (ii) pursuant to an exemption from the registration requirements under the 1933 Act.

Rule 144 under the 1933 Act sets forth conditions which if satisfied, permit persons holding control securities (affiliated shareholders, i.e., officers, directors or holders of at least ten percent of the outstanding shares) or restricted securities (non-affiliated shareholders) to sell such securities publicly without registration. Rule 144 sets forth a holding period for restricted securities to establish that the holder did not purchase such securities with a view to distribute. Under Rule 144, several provisions must be met with respect to the sales of control securities at any time and sales of restricted securities held between one and two years. The following is a summary of the provisions of Rule 144: (a) Rule 144 is available only if the issuer is current in its filings under the Securities an Exchange Act of 1934. Such filings include, but are not limited to, the issuer's quarterly reports and annual reports; (b) Rule

144 allows resale of restricted and control securities after a one year hold period, subjected to certain volume limitations, and resales by non-affiliates holders without limitations after two years; ( c ) The sales of securities made under Rule 144 during any three-month period are limited to the greater of: (i) 1% of theoutstanding common stock of the issuer; or (ii) the average weekly reported trading volume in the outstanding common stock reported on all securities exchanges during the four calendar weeks preceding the filing of the required notice of the sale under Rule 144 with the SEC. As a small business issuer, the volume limitation set forth at (c) (i) above would apply.



18

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or (ii) the average weekly reported trading volume in the outstanding common stock reported on all securities exchanges during the four calendar weeks preceding the filing of the required notice of the sale under Rule 144 with the SEC. As a small business issuer, the volume limitation set forth at (c) (i) above would apply.

All shares of common stock and shares of common stock underlying the warrants listed in the transactions set forth above became registered pursuant to our registration statement with was declared effective by the SEC on February 9, 2006.



|Equity Compensation Plan Information
|------------------------------------

|                          |  |                               |  |   |                               |  |                        
|------------------------- |  | ----------------------------- |  | - | ----------------------------- |  | -----------------------
|Plan Category             |  | Number of securities to be    |  |   | Weighted average exercise     |  | Number of securities   
|                          |  | issued upon exercise of       |  |   | price of outstanding options, |  | remaining available for
|                          |  | outstanding options, warrants |  |   | warrants and rights           |  | future issuance        
|                          |  | and rights                    |  |   |                               |  |                        
|                         
|                          |  | (a)                           |  |   | (b)                           |  | ( c)                   
|                         
|Equity compensation plans |  | 0                             |  | $ | .000                          |  | 0                      
|approved by security      |  |                               |  |   |                               |  |                        
|holders                   |  |                               |  |   |                               |  |                        
|                         
|Equity compensation plans |  | 940,000                       |  | $ | .207                          |  | 1,967,500              
|not approved by security  |  |                               |  |   |                               |  |                        
|holders (2)               |  |                               |  |   |                               |  |                        
|                         
|Total                     |  | 940,000                       |  | $ | .207                          |  | 1,967,500              

NOTE: The following plans have not been approved by the shareholders however, under our by-laws the directors are empowered to issue options and shares under the plans. The 2002 Compensatory Stock Option Plan permits the issuance of options for compensatory purposes to persons who are employees (as defined in the plan) or directors of the Company, entitling them to purchase common shares of the Company. An aggregate of 3,000,000 shares are available for purchase under the plan. The 2003 Employee Stock Compensation Plan permits the issuance of an aggregate of 5,000,000 common shares of the Company options for compensatory purposes to person who are employees (as defined in the plan) or directors of the Company, excluding shares already issued there under. Details of these plans may be found at Note 10 in the footnotes to the audited financial statements included as part of this report.

ITEM 6.    MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS.



|RESULTS OF OPERATIONS
|---------------------

HAT operating revenues consist primarily of service revenues and sales of materials consumed while providing services. World Jet revenues consist primarily of sales of aircraft parts. Cost of sales consists primarily of labor and materials, cost of parts and freight charges. Operating results have fluctuated in the past and may fluctuate significantly in the future. Many factors affect our operating results, including timing of repair orders and payments from large customers, competition from other third-party MRO service providers, the state of the aviation industry and the number of customers seeking services, the impact of fixed pricing on gross margins and our ability to accurately project our costs, our ability to obtain financing and other factors.

Significant portions of our operating expenses, such as insurance, rent, debt payments, certain salaries and such, are relatively fixed. Since we typically do not obtain long-term commitments from our customers, we must anticipate the future volume of orders based upon the historic patterns of our customers and upon discussions with our customers as to their future requirements. Cancellations, reductions or delays in orders by a customer or group of customers could have a material adverse effect on our business, financial condition and results of operations.

During 2007, revenues were $24,743,501which represents a decrease of 28.4% from 2006s figure of $34,542.195. Revenues for 2006 decreased 16.2% from 2005s figure of $41,228,648. The Company had a net loss of $3 million in 2007, net income of $.826 million in 2006 and net income of $3.123 million in 2005. In 2006, profit from operations declined from 2005s $2.4 million to a loss from operations of $2,109. In 2007, the loss from operations was $4.9 million.

19

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To understand the Companys path from 2005 profits to 2007 losses some of the major events that occurred during each year are as follows:



|2005In early July of 2005, The Companys subsidiary HAT, on behalf of subsidiary World Jet,agreed to purchase the inventory held on consignment belonging to Jetran International, Ltd.plus one DC9-82, serial number 48092 for a price of $2,900,000.On August 12, 2005, HAT entered into a five-year maintenance contract with the newMexican airline, Avolar. Potential value of this agreement was linked to the planned growthof Avolar. The business plan of Avolar called for a thirty aircraft fleet by mid 2008.On August 26, 2005, Global together with BCI formed Jetglobal to acquireand remarket commercial jet aircraft. On September 1, 2005, Jetglobal entered into anagreement to acquire a fleet of 26 Boeing 737-200 aircraft from Jetran International.2006The most significant event of 2006 was the erosion of the Companys cash position due to unpaid accountsreceivable balances of Avolar and BCI. Outstanding accounts receivable rose from $5 M to 7.9 M during the firstnine months of 2006. Our investment in Jetglobal grew about $2 million during the same period. Our partner inJetglobal, BCI, preferred to hold the aircraft assets rather than sell them. By the end of 2007, the parties hadreached an agreement in principal wherein BCI would pay the Company cash plus transfer, free and clear,ownership to the Company of enough aircraft out of the Jetglobal assets to settle in full all amounts due theCompany for services provided to BCI and from the Companys ownership in Jetglobal.2007Avolars increasing fleet size resulted in increasing receivables due HAT. At the same time, Avolars past duereceivables increased significantly. In order to protect the Companys financial status, late in February Management putAvolar on a COD basis and negotiated a schedule for Avolar to bring its account current. The parties also agreed thatAvolar would obtain whatever services and credit it could from other maintenance service providers in order to facilitateAvolars pay-down of monies due HAT. By the end of 2007, Avolar had made progress reducing the amount owedHamilton Aerospace, but Avolar was not in full compliance with the terms of its payment schedule agreed to with HAT.By the end of the second quarter of 2007, the Company had received all but one of the aircraft covered by thesettlement agreement with BCI, which was finalized on June 29, 2007. The book value of the aircraft to bereceived under this agreement was over $8.6 million.On September 4, 2007, the Company and Global Aircraft Leasing Partners, LLC, a Delaware limited liability company ("GALP") reached a tenative agreement that Global would assume a 40% equity interst in GALP. GALP is a start-upaircraft leasing venture formed to acquire aircraft, through a combination of debt and equity financing, and lease these commercial jet aircraft to operators throughout the world. It has been mutually agreed by the parties that in consideration for a40% equity participation in GALP,  the company will make a one time capital contribution of $40,000. As further consideration the Company will provide to GALP on going technical support to facilitate GALP's commercial aircraft purchasing
leasing and sales activities. All technical services provided to GALP by HAT and World Jet will be billed at Company-standard rates. The Company has made $20,000 in capital contribution as of December 31, 2007. A final operating
agreement has not yet been finalized and Global had no equity participation in GALP for the year ended December 31, 2007. Global will make an additional capital contribution or $20,000 upon the parties reaching a final operating agreement.
Global will not be required to invest capital in aircraft acquired by GALP, and all debt assumed by GALP as a result of aircraft acquisitions will be non-recourse with respect to the Company. Other members of GALP will include equity
funding specialists and aircraft leasing professsionals. Global and GALP have also agreed that Global will have first right of refusal for all aircraft maintenance, aircraft parts and technical consulting requirements that GALP may have as
a result of its aircraft acquisition and leasing activities.
On October 11, 2007, BCI presented the Company with title to the final aircraft due from the settlementagreement.On November 1, 2007, our primary lender M&I Bank extended the matruity date of our $5 million line of credituntil January 31,2008.On December 20, 2007, the Company entered into and closed on three non-convertible secured debenturefinancing agreements in the total amount of $10 million (See the Liquidity section of this document for furtherdetails). The debentures carry an interest rate of 15% per annum. The Debentures also provide for a cash flowrecapture to the Holders equal to 60% of any proceeds related to the sale of Global's aircraft inventory and certainreceivables. The Debentures mature on December 19, 2008. Funds from this transaction were used to pay-off our
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

20

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primary lender, M&I Bank, as well as, all other short-term debt. Additionally, the balance provides operating capital to enable us the time to sell our aircraft inventory and ramp-up operations of our HAT facility to capacities prior to the stoppage of work for Avolar and BCI.

The table below shows the sales and cost of sales for each of our operation segments for the years ended December 31, 2007, 2006 and 2005, respectively. The 2006 increase in maintenance reflects about $4.7 million in sales related to work done on Avolar in Tijuana, which began in late 2005. In 2007, sales related to our Tijuana operation fell to $2.3 million due to our temporary suspension of work due to non-payment. This only partially accounts for the 49% drop in revenue in our maintenance segment. Maintenance felt the effects of the substantial cash problems created in 2006 by the non-payment of invoicing by customers, Avolar and BCI. Our partner in Jetglobal, BCI, desired that the partnership hold aircraft assets rather than sell them. Our membership in Jetglobal had been undertaken to increase revenue and we had a sizable equity position of over $6M. Additionally, the resulting settlement reached with BCI to take-over our me

mbership in Jetglobal, which was not finalized until mid-year, netted us an inventory of aircraft but no cash.

2007
     
     
     
     2006
     
     
     
     2005Sales, maintenance, repair, overhaul
     
     $
     14,364,784
     
     
     $
     24,331,466
     
     
     $
     19,134,757Sales, aircraft trading
     
     
     7,900,000
     
     
     
     3,223,000
     
     
     
     13,550,500Sales, parts
     
     
     2,239,641
     
     
     
     4,634,155
     
     
     
     6,388,380Sales, other
     
     
     239,076
     
     
     
     2,353,574
     
     
     
     2,155,011Total sales
     
     $
     24,743,501
     
     
     $
     34,542,195
     
     
     $
     41,228,648Cost of sales
     
     $
     (10,758,759
     )
     
     $
     (19,776,552
     )
     
     $
     (16,903,015
     )Cost of sales, aircraft trading
     
     
     (6,848,254
     )
     
     
     (3,190,369
     )
     
     
     (10,019,728
     )Cost of sales, parts
     
     
     (693,607
     )
     
     
     (2,012,101
     )
     
     
     (3,389,964
     )Cost of sales, other
     
     
     (7,353
     )
     
     
     (769,027
     )
     
     
     (529,754
     )Inventory write down
     
     
     (393,752
     )
     
     
     (192,775
     )
     
     
     (215,500
     )Total cost of sales
     
     $
     (18,701,725
     )
     
     $
     (25,940,824
     )
     
     $
     (31,057,961
     )


Those who look to revenue growth as the fundamental indication of a companys success and growth need to be aware that no matter how much revenue is generated by trading partners in which we have minority interest and no control over management, no increase in revenue will be shown on the Companys results. Net income, however, will reflect the Companys percentage of the net income of trading partners. Revenues derived from aircraft sales made by our Jetglobal partnership were $214,800 in 2007, in 2006 were $1,808,744 and in 2005 our share of the Jetglobal loss was $157,874.

Company SG&A expenses in 2007 were $10,908,740 and as a percentage of revenue were 44%. In 2006 were SG&A expenses were $8,591,738 and as a percentage of revenue were 25%. In 2005, SG&A expenses were $7,780,332, which was 19% as a percentage of revenues.

During 2007, SG&A expenses included several unusual items:

The expense related to the warrants issued as part of the December, 2007 Debenture agreement was $581,282. The issuance of these warrants triggered a provision in some of our existing warrants that required they be repriced. The expense recorded due to the repricing was $69,241.

The Company paid $130,528 in various expenses to extend the M&I loan and to locate and secure another financing vehicle.

Bad Debt expense for 2007 was $3,610,776 as compared to $338,000 in 2006. This amount included the write-off of amounts due from the Falcon bankruptcy in the amount of $283,940, a portion of the receivable balance due from BCI, $562,384, approximately $929,000 for Avolar, approximately $775,000 in aged receivables from various customers that the Company has determined to be uncollectible and an increase to our reserve balance of about $950,000 for accounts over 90 days and another $54,000 reserve for current accounts.

21

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During 2007, SG&A expenses included approximately $175,000 in commission expense compared with $669,500 in 2006 and $1,260,000 in 2005. Other notable increases in 2006 SG&A expenses included:

Our World Jet subsidiary had an increase in SG&A of $267,421 the largest part of which was associated with the movement of inventory to its new location at 7001 South Park coupled with the counting and classification, prior to the 2007 audit of the balance of the inventory purchased from Jetglobal.

Global had a significant increase in professional fees in the amount of $618,000 over the 2005 amount. Approximately $96,900 was related to auditing and accounting fees, $179,000 increase in legal fees, $132,000 increase in outside professional services.

Interest expense for 2007 was $1,261,813, in 2006 was $587,183 and in 2005 was $386,927. This significant increase in interest expense is directly linked to the severe cash shortages the Company experienced. Funds to operate were borrowed at higher rates.

The following table graphically depicts the operating performance for Global, HAT and World Jet subsidiaries on a stand-alone and consolidated basis for the year ended December 31, 2007:

|         |  |                         |  |             |   |  |             |   |  |             |   |  |              |   |  |              |  
|-------- |  | ----------------------- |  | ----------- | - |  | ----------- | - |  | ----------- | - |  | ------------ | - |  | ------------ | -
|Period   |  |                         |  | Global      |   |  | HAT         |   |  | World Jet   |   |  | * Eliminate  |   |  | Consolidated |  
|         |  |                         |  | Stand Alone |   |  | Stand Alone |   |  | Stand Alone |   |  | Intercompany |   |  |              |  
|         |  |                         |  | $           |   |  | $           |   |  | $           |   |  | $            |   |  | $            |  
|         |  |                         |  |             |   |  |             |   |  |             |   |  |              |   |  |              |  
|2007     |  | Revenues                |  | 7,900,000   |   |  | 14,809,618  |   |  | 5,516,972   |   |  | (3,483,089   | ) |  | 24,743,501   |  
|Year End |  | Cost of Sales           |  | (6,848,337  | ) |  | (11,440,802 | ) |  | (3,872,958  | ) |  | 3,460,372    |   |  | (18,701,725  | )
|Results  |  | Expenses                |  | (3,646,290  | ) |  | (5,976,319  | ) |  | (1,311,316  | ) |  | 25,185       |   |  | (10,908,740  | )
|         |  | Operating Profit (Loss) |  | (2,594,627  | ) |  | (2,607,503  | ) |  | 332,698     |   |  | (2,468       | ) |  | (4,866,964   | )

- The Eliminate column reflects the $ amounts of Inter-Company Sales by World Jet to HAT in 2007.
- On a consolidated basis Revenues and Cost of Sales are reduced to reflect the Revenues and Cost of Sales for external sales only, with a zero $ impact on stand alone or consolidated profit (loss) figures.

The following table graphically depicts the operating performance for Global, HAT and World Jet subsidiaries on a stand-alone and consolidated basis for the year ended December 31, 2006:

|         |  |                         |  |             |   |  |             |   |  |             |   |  |              |   |  |              |  
|-------- |  | ----------------------- |  | ----------- | - |  | ----------- | - |  | ----------- | - |  | ------------ | - |  | ------------ | -
|Period   |  |                         |  | Global      |   |  | HAT         |   |  | World Jet   |   |  | * Eliminate  |   |  | Consolidated |  
|         |  |                         |  | Stand Alone |   |  | Stand Alone |   |  | Stand Alone |   |  | Intercompany |   |  |              |  
|         |  |                         |  | $           |   |  | $           |   |  | $           |   |  | $            |   |  | $            |  
|         |  |                         |  |             |   |  |             |   |  |             |   |  |              |   |  |              |  
|2006     |  | Revenues                |  | 4,475,000   |   |  | 26,058,040  |   |  | 10,591,165  |   |  | (6,582,010   | ) |  | 34,542,195   |  
|Year End |  | Cost of Sales           |  | (3,489,909  | ) |  | (20,929,517 | ) |  | (8,103,408  | ) |  | 6,582,010    |   |  | (25,940,824  | )
|Results  |  | Expenses                |  | (3,394,122  | ) |  | (3,342,380  | ) |  | (1,866,978  | ) |  |              |   |  | (8,603,480   | )
|         |  | Operating Profit (Loss) |  | (2,409,031  | ) |  | 1,786,143   |   |  | 620,779     |   |  |              |   |  | (2,109       | )

The following table graphically depicts the operating performance for Global, HAT and World Jet subsidiaries on a stand-alone and consolidated basis for the year ended December 31, 2005:

22

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|         |  |                  |  |             |   |  |             |   |  |             |   |  |              |   |  |              |  
|-------- |  | ---------------- |  | ----------- | - |  | ----------- | - |  | ----------- | - |  | ------------ | - |  | ------------ | -
|Period   |  |                  |  | Global      |   |  | HAT         |   |  | World Jet   |   |  | * Eliminate  |   |  | Consolidated |  
|         |  |                  |  | Stand Alone |   |  | Stand Alone |   |  | Stand Alone |   |  | Intercompany |   |  |              |  
|         |  |                  |  | $           |   |  | $           |   |  | $           |   |  | $            |   |  | $            |  
|         |  |                  |  |             |   |  |             |   |  |             |   |  |              |   |  |              |  
|2005     |  | Revenues         |  | 11,396,538  |   |  | 23,505,112  |   |  | 10,622,681  |   |  | (4,295,683   | ) |  | 41,228,648   |  
|Year End |  | Cost of Sales    |  | (7,930,337  | ) |  | (19,594,059 | ) |  | (7,829,248  | ) |  | 4,295,683    |   |  | (31,057,961  | )
|Results  |  | Expenses         |  | (2,489,347  | ) |  | (3,692,489  | ) |  | (1,599,557  | ) |  |              |   |  | (7,781,393   | )
|         |  | Operating Profit |  | 976,854     |   |  | 218,564     |   |  | 1,193,876   |   |  |              |   |  | 2,389,294    |  

While the Company aggressively seizes revenue-producing opportunities such as aircraft trading, management gauges results by looking at what has been the core revenue producing activity to date, the sale of labor hours in our maintenance segment. In 2007, revenue produced from labor was $8.6 million; in 2006, revenue produced from labor was $14.3 million and was virtually the same in 2005 at $14.3 million. Billable hours for 2006 and 2005 were essentially the same at approximately 240,000. Billable hours for 2007 decreased about 36% or 87,000. The comparative costs for all direct labor, including work performed by outside contractors, was $5,005,874 in 2007 compared to $8,945,712 in 2006 and $9,190,898 in 2005, representing 44% decrease in cost from 2006 to 2007 and a 3% decrease in cost from 2005 to 2006. The relationship between direct labor costs to direct labor revenues decreased approximately 4% to 58% during 2007 and 2% to

about 62% in 2006 as compared with 64% in 2005. Direct labor percentages will always vary to some degree due to the nature of flat rate bidding as opposed to billing for all time and materials. Included in the operating expenses for the Company in the years ended December 31, 2007, 2006 and were $1,086,360, $617,459 and $326,594, respectively, associated with the award of stock and stock options. $581,282 of the 2007 amount was related to the options issued as part of the debenture transaction discussed earlier.

Due to the fact that World Jets largest customer is HAT, part sales decrease as maintenance decreases. Sales by our part sales segment to our maintenance for 2007, 2006 and 2005 were $3.5M, $6.6M and $4.3M respectively. These results represent 24%, 27% and 23% of the MRO sales for the corresponding periods. This relationship will vary to a degree due to the particular mix of customers serviced during the periods. We do have some customers that typically furnish their own material to jobs. It is certain that the cash crunch experienced during late 2006 and 2007 made it necessary to curtail efforts to grow the brokering operations of our parts sales segment. Cost of parts sold were 31%, 43% and 53% of parts revenue for 2007, 2006 and 2005 respectively. The decreasing percentage indicates an increased use of owned inventory as opposed to brokered inventory.

The most significant decrease in revenue from 2005 to 2006 was experienced in aircraft sales, as most aircraft sales took place in Jetglobal. Aircraft trading in 2006 resulted in a decrease of $10 million in sales when compared to the prior year. In 2007, the Company sold one aircraft for $7.9, which is an increase in revenue for that segment of 145% over 2006. Since aircraft trading is an opportunistic venture, with the value of one type of aircraft varying substantially from the value of another, sales as well as cost of sales will vacillate based on the terms of each individual transaction.



|LIQUIDITY AND CAPITAL RESOURCES
|-------------------------------

Liquidity

On December 9, 2005, Global, HAT and World Jet, (collectively the "Borrowers") closed on a first Modification to the May 5, 2005 Initial Loan Agreement with M&I Marshall & Ilsley Bank ("M&I Bank"). The modification increased the $2.5 million operating line of credit to $5 million ("Line of Credit"); added a Guidance Line of Credit in the amount of $7 million ("Guidance Credit") solely for the acquisition of aircraft and Letter of Credit Facilities in combined amounts not to exceed $200,000. The Guidance Credit portion of the agreement  expired mid 2007. The Letter of Credit Facility expired during the second quarter of 2007 and the total amount of the Line of Credit was amended to $4,872,000. The interest rate on the Line of Credit was reduced from 3.50% per annum to 3.00% per annum in excess of the applicable LIBOR rate. At September 30, 2007 the applicable interest rate was 8.72% per annum. The Line of Credit
 was secured by a first priority lien on Global's, HAT's and WJ's personal property. The original term of the Line of Credit expired on October 31, 2007 and the entire outstanding principal balance, all accrued and unpaid interest, and all other sums due and payable under the Line of Credit were due on the expiration date. During the fourth quarter of 2007, M&I extended this expiration date 90 days until Jaunary 31, 2008.

On December 20, 2007, the Company secured other financing, (seeShort-Term Financingbelow), and satisfied the M&I obligation in full. The proceeds of this new financing also were used to satisfy the following obligations:

- On June 21, 2007, the company secured a line of credit with the Frank and Maxine Smith Family Trust in the amount of $1,000,000. The terms of the line of credit include an initial $25,000 fee, 10% of each draw-down amount as fees and simple interest on the unpaid balance at 15% per annum. The note was due and payable November 20, 2007. John B. Sawyer was guarantor on the line of credit.
- On June 30, 2007, the company entered into a note agreement with Jeffrey Ervine, a related party pursuant to the GALP partnership. The principal amount of the note was $800,000 with simple interest at 12% per annum plus a fee of $80,000. The term of the note was six months.
- During the second quarter of 2007, the Company received $100,000 from Raymon C. Flores (Flores). On July 17, 2007, the Company and Flores entered into a note for $300,000. The Company received an additional $200,000 during July 2007. The interest on the note was payable at $8,000 per week and the unsecured note was due October 27, 2007. Prior to the formal agreement on July 17, 2007, the Company had agreed to pay interest on the $100,000 received during the second quarter of 2007 at a rate of $4,000 per week. On October 31, the Company paid $200,000, plus accr

ued interest, and the due date for the remaining balance of $100,000 was extended sixty days.

During 2006, Avolars increasing fleet size resulted in increasing receivables due HAT. At the same time, Avolars past due receivables increased significantly. In order to protect the Companys financial status, late in February 2007, Management put Avolar on a COD basis and negotiated a schedule for Avolar to bring its account current. The parties agreed that Avolar would obtain whatever services and credit it could from other maintenance service providers in order to facilitate Avolars pay-down of monies due HAT. The payment amount due each week on Avolars payment schedule was reduced during the second quarter and currently Avolar is in compliance with their payment agreement. Avolar has stated its intention to bring its accounts current with HAT and World Jet and renew its maintenance and support agreements with both companies.

By the end of the fourth quarter 2006 and into the first quarter 2007, the past due amounts due HAT by BCI had also reached unacceptable levels. The parties have negotiated a settlement, which was discussed earlier, related to the transfer of certain aircraft to eliminate the Companys ownership in Jetglobal. Although BCI is presently cooperating with the Company to resolve payment issues equitably, a final agreement relative to a cash payment to settle the amounts due by BCI has not at this time been reached between the companies. Management believes that the receivable amounts reflected on the financial statements, presented herein, are recoverable

At this time, the HAT plans to expand its capabilities to include MRO servicing of new-generation aircraft. It is estimated that the necessary tooling to accomplish this expansion will cost between $200,000 and 250,000. The Company has no plans to make any other significant capital expenditures during 2008.

Our ability to make payments of principal and interest on outstanding debt will depend upon our future operating performance, which will be subject to economic, financial, competitive and other factors, some of which are beyond our control. Our ability to repay our indebtedness is dependent on several factors: our continued ability to secure high profit margin jobs, more fully utilizing our capacities, creating a higher bottom line and consequently more cash; and our ability to establish revolving credit lines, which we can draw on as needed.

Changes in the Companys Balance Sheet for the year ended December 31, 2007 reflected several events. Total assets increased from $28,474,276 at December 31, 2006 to $29,694,148. Significant changes for the period were:

Cash on hand increased $1,117,158 due to the funding from the debenture transaction, (see Short-Term Financingbelow).

Accounts receivable decreased $458,679.

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Total inventory increased $8,576,810, largely as a result of Global receiving aircraft valued at $8,650,000 under the settlement agreement with BCI.

The notes receivable balance of $455,859 decreased to $0 as all notes due to the company were paid off.

Due from equity investee partner decreased from the 2006 balance of $3,949,419 to $472,000 as a result of the Jetglobal settlement with BCI.

Equity in net assets of and advances to affiliates decreased $6,063,067 due to the Jetglobal Settlement Agreement.

During the year ended December 31, 2007 total liabilities increased from $12,720,070 at December 31, 2006 to $15,952,315 primarily due to:

Notes payable increased from $5,101,568 at December 31, 2006 to $10,268,091 at December 31, 2007 as a result of an additional $10,000,000 debenture agreement, (see Short-Term Financingbelow), and the paying off of all prior debt, with the exception of insurance financing.

Accounts Payable decreased $1,949,791.

Billings in excess of costs and estimated earnings on contracts in progress increased $598,736.

Cash

As of December 31, 2007, we had $1,221,598 in cash on hand and approximately $7,412,120 in accounts receivables.

During 2007, the Company experienced a major cash deficit. In December of 2007 the Company was able to find the source of funding detailed underShort-Term Financingbelow. This funding was used to (i) eliminate the expensive short-term debt the Company had acquired to provide the cash necessary for day-to-day operations and (ii) pay off a $5,00,000 loan from M&I Marshall & Ilsley Bank.

The Company believes that it will fully recover from the effects of the cash shortage which they experienced for most of 2007. Management bases its assessment on several factors:

- The Company will continue efforts to sell the aircraft received due to the termination of its partnership in Jetglobal. Management believes that a conservative estimate of cash realized from the sale of these aircraft will be in excess of $8.6 million.
- The Company will continue to aggressively collect on our older outstanding receivable balances from Avolar and BCI.
- Our HAT operation will increase its marketing effort in order to secure new customers to fill the void left by our withdrawal from Jetglobal and our temporary cessation of work for Avolar.HAT is being successful in securing profitable maintenance contracts with new customers.
- Our HAT subsidiary has completed and billed over $2 million in work contracted by BCI on aircraft owned by BCI and still located in disabled condition on HATs facility. These aircraft have been repossessed by GMAC, who plans to place them with another operator. Management has taken a firm position that all money improvements made to the aircraft will be received prior to the departure of the aircraft.

Management believes that anticipated cash flows from the operations of HAT and World Jet and from the anticipated sale of our aircraft inventory will be adequate to sufficiently provide working capital and satisfy the requirements of our short-term debt. We cannot assure you that financing alternatives will be available to us in the future to support our working capital requirements should they be needed.



|Short-Term Financing
|--------------------

On December 20, 2007, Global and its subsidiaries HAT, World Jet and Hamilton Aerospace S.A. de C.V. ("HATMEX") (collectively the "Companies") entered into and closed on three non-convertible secured debenture financing agreements with two accredited institutional investors ("Holders") in the total amount of $10 million (collectively the "Debentures"). These Debentures consist of (i) one non-convertible senior secured debenture in the amount of $5 million; (ii) one non-convertible senior secured debenture in the amount of $3 million; and (iii) one non-convertible junior secured debenture in the amount of $2 million. The Debentures accrue interest at the rate of 15% per annum which is payable quarterly in arrears beginning April 1, 2008. The Debentures also provide for a cash flow recapture to the Holders equal to 60% of any proceeds related to the sale of Global's aircraft inventory. The Debentures mature on December 19, 2008.

In connection with the Debentures, the Companies and Holders executed a Pledge and Security Agreement, Aircraft Security Agreements, Securities Purchase Agreement, Registration Rights Agreement, and a Post Closing Agreement. Additionally, Global issued a Warrant (as defined and detailed below) to one Holder as an inducement to purchase a Debenture. Mr. John B. Sawyer, President of the Companies, also executed a personal guaranty for $2 million of the Debentures ("Personal Guaranty"). These transaction documents are attached hereto as Exhibits to this Form 8-K. Mr. Ian Herman, CEO of the Companies, executed an identical personal guaranty to Mr. Sawyer for $1 million of the Personal Guaranty.

Pursuant to the Pledge and Security Agreement and Aircraft Security Agreements, the Debentures are secured by (a) a first lien on all the current and future assets of the Companies including any owned aircraft; (b) the equity interests currently held by Global in HAT, WJ and HATMEX; and (c) the 40% membership interest of Global in Global Aircraft Leasing Partners, LLC. However, in the event of default, foreclosure of the foregoing equity and membership interests held by Global can only be enforced if the foreclosure on all other assets of the Companies is insufficient to satisfy repayment of the Debentures.

Similar to the foreclosure conditions set forth in the preceding paragraph, enforcement of the Personal Guaranty cannot occur until and unless the foreclosure on all other assets of the Companies is insufficient to satisfy repayment of the Debentures.

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As an inducement for Holder Victory Park Master Fund, Ltd. ("Victory Park") to purchase a Debenture, Global issued Victory Park a 5-year warrant exercisable into 1,500,000 shares of Global common stock ("Common Stock") at an exercise price of $0.45 per share ("Warrant"). However, if Victory Park should choose to exercise the Warrant then it would receive a reduced number of Common Stock shares based upon the cashless exercise formula.

The Warrant also contains a contingent obligation which shall be determined pursuant to a one-time value test on December 20, 2008 ("Test Date"). In the event that the difference between the Common Stock VWAP (for the 20 trading days prior to such Test Date) and the exercise price multiplied by the number of Warrant shares is not at least equal to $750,000 ("Target Value"), then Global will be obligated to issue an additional warrant to Victory Park. If Global is obligated to issue an additional warrant (such warrant will contain identical terms and provisions as the Warrant set forth above), that warrant shall be exercisable into that number of Common Stock shares that would cause the additional warrant and the Warrant combined to equal the Target Value, but in no event shall the additional warrant be exercisable into more than 500,000 warrant shares.

Under the Registration Rights Agreement, Victory Park cannot request Global to register the underlying warrant shares for at least six months after the closing date. After June 20, 2008, Victory Park can request that Global commence the process to register the warrant shares. If Global is required to register the warrant shares subsequent to June 20, 2008, Global will be obligated to file a registration statement within 45 days of such request and cause the registration statement to become effective within 270 days of filing. In the event Global is asked to file a registration statement and fails to comply with the filing and effectiveness deadlines as set forth above, Global will be obligated to pay Victory Park liquidated damages in the amount of 2% of the total amount of the Debentures each and every month until Global satisfies the filing and/or effectiveness requirements.

The Post Closing Agreement allows the Companies to complete certain conditions of closing within certain time frames subsequent to closing and subjects the Companies to an event of default should the Companies fail to meet such conditions within the time frames set forth in the Post Closing Agreement.

Upon the occurrence of certain events of default as defined in the Debentures and the Post Closing Agreement, including events of default under the transaction documents related to the Debentures, the full principal amount of the Debentures, together with interest and other amounts owing become immediately due and payable. Moreover, an event of default also subjects the assets of the Companies and the equity and membership interests as well as the Personal Guaranty to foreclosure.

Proceeds of the Debentures were utilized to satisfy and terminate the Company's existing credit facility ($5,052,336.26) and other existing indebtedness as well as to pay down certain trade accounts and fund working capital.

Pursuant to the closing of this transaction, the Companies incurred a closing fee equal to 3% of the Debentures and legal and accounting costs.

M&I Marshall & Ilsley Bank has an outstanding Letter of Credit for $128,000 to Tucson Airport Authority as part of the lease agreement for the HAT facility. This Letter of Credit is secured by a certificate of deposit in the amount of $128,000.



|Long-Term Financing
|-------------------

The long-term liabilities of Global primarily consist of $171K due on capitalized lease obligations.

Possible Cancellations, Reductions or Delays

A large portion of our operating expenses is relatively fixed; therefore cancellations, reductions or delays in orders by a customer or group of customers could materially adversely affect our business, financial condition or results of operations.



|CRITICAL ACCOUNTING ESTIMATES
|-----------------------------

Financial Reporting Release No. 60 of the SEC encourages all companies to include a discussion of critical accounting policies or methods used in the preparation of the financial statements. Our consolidated financial statements filed as part of this annual report include a summary of the significant accounting policies and methods used in the preparation of our consolidated financial statements.

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Use of Estimates:Management's Discussion and Analysis of Financial Condition or Plan of Operation is based upon our consolidated financial statements, which have been prepared in accordance with accounting principles generally accepted in the United States. The preparation of our financial statements requires management to make estimates and judgments that affect the reported amounts of assets, liabilities, revenues and expenses, and the related disclosure of contingent assets and liabilities. Management evaluates these estimates on an on-going basis, including those related to estimated losses on disposal of discontinued operations, the allowance to reduce inventory to the lower of cost or net realizable value, the estimated profit recognized as aircraft maintenance, design and construction services are performed, the allowance for doubtful acc

ounts and notes receivable, future cash flows in support of long lived assets, medical benefit accruals, and the estimated fair values of facilities under capital leases. Management bases its estimates on historical experience and on various other assumptions that they believe are reasonable under the circumstances, the results of which form the basis for making judgments about the carrying value of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates under different assumptions and conditions.

Trade Accounts Receivable:Trade accounts receivable represent amounts billed but uncollected on both completed and in-progress aircraft repair and maintenance contracts as well as amounts billed but uncollected on parts shipped to customers.

Accounts receivable are stated at the amount management expects to collect from outstanding balances. Management provides for probable uncollectible amounts through a charge to earnings and a credit to a valuation allowance based on its assessment of the current status of individual accounts. The allowance is estimated as a percentage of accounts receivable based on a review of accounts receivable outstanding and the Company's prior history of uncollectible accounts receivable. Balances that are still outstanding after management has used reasonable collection efforts are written off through a charge to the valuation allowance and a credit to trade accounts receivable.

Inventory:Inventories are stated at the lower of cost (first-in, first-out) or market. Inventories include new, used parts and parts stripped from aircraft. These inventory items are initially carried at original cost basis determined on the pro-rata fair value of the individual parts based on market or catalog pricing. Inventory items held for over one year are no longer classified as inventory, non-current. All aircraft parts inventory are grouped as "inventory" and accounted under Current Assets category. This is based on standard aviation industry practice of showing all aircraft parts under single line item of inventory. Aircraft parts typically have more than one year of life. Rotable parts have the same life as the aircraft. Repairable parts can be repaired several times over the life of the aircraft and installed

on the aircraft. This is a reclassification to conform with what we now believe is more appropriate. This change will not impact the current quarter results or past results of the company. When Management determines that an allowance for slow moving and obsolete inventory should be provided for, the allowance is considered as an expense for the company.

The Company reviews the market value of inventories whenever events and circumstances indicate that the carrying value of inventories may not be recoverable from the estimated future sales price less cost of disposal and normal gross profit. In cases where the market values are less than the carrying value, a write down is recognized equal to an amount by which the carrying value exceeds the market value of inventories.

Property and Equipment:Property and equipment are recorded at cost. Depreciation is provided for on the straight-line on the straight-line method over the estimated useful lives of the assets. The estimated useful life of computer equipment and software is three years at both our HAT and World Jet subsidiaries; the estimated useful life of all other categories of assets at our HAT subsidiary is five years. World Jet uses estimated useful lives of 3, 5, and 7 years for its other assets. Amortization of leasehold improvements is computed using the shorter of the lease term or the expected useful life of the assets. Maintenance and repairs that neither materially add to the value of the property nor appreciably prolong its life are charged to expense as incurred. Betterments or renewals are capitalized when incurred.

The Company reviews the carrying value of property, plant and equipment for impairment whenever events and circumstances indicate that the carrying value of an asset may not be recoverable from the estimated future cash flows expected to result form its use and eventual disposition. In cases where undiscounted expected future cash flows are less than the carrying value, an impairment loss is recognized equal to an amount by which the carrying value exceeds the fair value of assets. The factors considered by management in performing this assessment include current operating results, trends, and prospects, as well as the effects of obsolesce, demand, competition, and other economic factors.

Revenue and Cost Recognition:Revenues from fixed-fee contracts or portions of contracts for MRO sales are recognized by employing the percentage-of-completion method, measured by the cost-to-cost method, commencing when progress reaches a point where experience is sufficient to estimate final results with reasonable accuracy. The cumulative catch-up method is used to account for changes in estimates of total revenues, total costs or extent of progress. Each project is considered complete when the subject aircraft departs, or is cleared to depart, our facility. Revision in cost and labor hour estimates and recognition of losses, if any, on these contracts are reflected in the accounting period in which the facts become known. Revenue from part sales is recognized when parts are shipped. Revenues from time and material contracts and all other ancillary services are recognized as the services are performed. Revenue from aircraft sales is recognized when the customer accepts delivery of the aircraft and/or when title is transferred.

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Value of Share-Based Payments:The value of stock and warrants issued as payment is determined by the closing price of the Companys stock at measurement date. In connection with the adoption of SFAS 123R, the company values options and warrants by application of the Black Scholes Model.

ITEM 7.    FINANCIAL STATEMENTS.

The financial information required by Item 8 is included following Part II of this report.

ITEM 8.    CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE.

a) Effective January 1, 2007, Epstein, Weber & Conover, PLC (Epstein Weber) combined its practice with Moss Adams LLP (Moss Adams) and therefore resigned as the independent registered public accounting firm for Global Aircraft Solutions, Inc. (the Company). According to information provided to the Company, all of the partners of Epstein Weber have become partners of Moss Adams.

The reports of Epstein Weber on the Companys financial statements for the fiscal year ended December 31, 2005 did not contain an adverse opinion or a disclaimer of opinion and were not qualified or modified as to uncertainty, audit scope or accounting principles. In connection with the audits of the Companys financial statements for the fiscal year ended December 31, 2005, and in the subsequent interim periods through January 1, 2007, (1) there were no disagreements with Epstein Weber on any matter of accounting principles or practices, financial statement disclosure or auditing scope and procedure which, if not resolved to the satisfaction of Epstein Weber, would have caused Epstein Weber to make reference to the matter in its report and (2) there were no reportable events as that term is defined in Item 304 of Regulation S-K promulgated under the Securities Exchange Act of 1934 (Item 304).

b) Effective January 19, 2007, the Company engaged Moss Adams to act as the Companys principal independent accountant. The Audit Committee of the Board of Directors of the Company approved the decision to engage Moss Adams.

c) On July 2, 2007, the Audit Committee of the Board of Directors of the Company voted to dismiss Moss Adams, LLP as the Company's independent registered public accountant. Moss Adams, LLP was notified of the dismissal on July 2, 2007. None of the reports of Moss Adams, LLP on the Company's financial statements for the year ended December 31, 2006 or the subsequent interim period through the date of this filing contained an adverse opinion or disclaimer of opinion, or was qualified or modified as to uncertainty, audit scope or accounting principles. Since the retention of Moss Adams, LLP on January 9, 2007, and through July 2, 2007 there have been no disagreements with Moss Adams, LLP on any matter of accounting principles or practices, financial statement disclosure, or auditing scope or procedure involving Moss Adams' audit of the Company's consolidated financial statements on Form 10-K for the fiscal year ended December 31, 20

06 or a review of the Companys financial statements on Form 10-Q for the quarter ended March 31, 2007, which disagreements if not resolved to the satisfaction of Moss Adams, LLP would have caused them to make reference thereto in their reports on the financial statements of the Company for such years. Except as stated below with respect to Jetglobal, LLC there were no "reportable events" as that term is defined in Item 304 of Regulation S-K promulgated under the Securities Exchange Act of 1934 ("Item 304").

Management of the Company and the Companys independent registered public accountants, Moss Adams LLP, determined a material weakness associated with its accounting for Jetglobal, LLC. The material weakness was related to lack of sufficient control over the accounting and financial reporting relative to the equity accounting for it 30% owned investee, Jetglobal, LLC. The Registrant had previously had no access to financial data of this entity and did not receive data from the joint venture partner, which resulted in a lack of control to detect errors should they occur and untimely preparation of the financial statements.

d) On July 2, 2007, the Audit Committee of the Board of Directors of the Company engaged Daszkal Bolton, LLP ("DB") as the Company's registered public accounting firm with respect to the audit of the Company's consolidated financial statements for the fiscal year ending December 31, 2007 as well as reviewing all interim financial filings beginning with the quarter ending June 30, 2007. The decision to engage DB was made by the Audit Committee of the Board of Directors. Neither the Company nor someone on behalf of the Company consulted with DB regarding any of the items listed in Item 304(a)(1)(v) of Regulation S-K.

During the fiscal year ended December 31, 2006, and during all subsequent periods through July 2, 2007, the Company did not consult Daszkal Bolton regarding the application of accounting principles to a specified transaction, either completed or proposed, the type of audit opinion that might be rendered on the Companys

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financial statements or any matter that was the subject of a disagreement with its former accountants or a reportable event as those terms are defined in Item 304.

ITEM 8A.    CONTROLS AND PROCEDURES.

MANAGEMENTS ANNUAL REPORT ON INTERNAL CONTROL OVER 
FINANCIAL REPORTING

The Company is responsible for establishing and maintaining adequate internal control over financial reporting as defined in Rules 13a-15(f) and 15d-15(f) under the Securities Exchange Act of 1934. The Companys internal control over financial reporting is a process designed under the supervision of the Companys Chief Executive Officer that: (i) pertains to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the Companys assets; (ii) provides reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements for external reporting in accordance with accounting principles generally accepted in the United States, and that receipts and expenditures are being made only in accordance with authorization of the Companys management a

nd directors; and (iii) provides reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of the Companys assets that could have a material effect on the financial statements.

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedure may deteriorate. As a non-accelerated filer, management has assessed the effectiveness of the Companys internal control over financial reporting as of December 31, 2007. In making its assessment of internal control over financial reporting, management used the criteria set forth by the Committee of Sponsoring Organizations (COSO) of the Treadway Commission inInternal Control  Integrated Framework.. Based on this assessment, management concluded that certain controls and procedures were not effective. An explanation of the deficiencies is set forth below.

The Certifying Officers determined that certain deficiencies involving internal controls constituted material weaknesses as of the end of the period covered by this Annual Report. The deficiencies identified related to audit adjustments made due to limited or no review procedures performed by management beyond initial preparer calculations and estimates. Additionally, the Company identified a lack of formal control design structure for the review of external financial data.

ITEM 9.    DIRECTORS AND EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE

Article IV of the By-Laws of the Company provides that the Companys Board of Directors shall consist of not less than one (1) and not more than seven (7) Directors and that at least one-fourth in the number of Directors shall be elected annually. In accordance with this allowance for staggered terms for Directors, the term of service as a Board Member, as voted on at the 2006 Annual Meeting, is staggered as follows:

1)
     Gordon D. Hamilton was elected to serve a one (1) year term beginning May 2006, and is nominated for re- election.2)
     Alfredo Mason was elected to serve a one (1) year term beginning May 2006. Mr. Mason resigned 2007 and Michael Hannley was selected to serve on the Board until such time as he can be voted on at the annual meeting. .3)
     John B. Sawyer was elected to serve a two (2) year term beginning May 2006;4)
     Lawrence Mulcahy was elected to serve a two (2) year term beginning May 2006;5)
     Ian Herman was elected to serve a three (3) year term beginning May 2006;6)
     Seymour Siegel was elected to serve a three (3) year term beginning May 2006;


|                                                                            |  |     |  |                       |  |                   |  |        
|--------------------------------------------------------------------------- |  | --- |  | --------------------- |  | ----------------- |  | -------
|NAME                                                                        |  | AGE |  | POSITION              |  | DATE FIRST        |  | TERM   
|                                                                            |  |     |  |                       |  | ELECTED/APPOINTED |  | EXPIRES
|                                                                            |  |     |  |                       |  |                   |  |        
|Ian Herman                                                                  |  | 61  |  | Chairman/CEO/Director |  | 05/02             |  | 05/09  
|John Sawyer                                                                 |  | 42  |  | President/Director    |  | 05/02             |  | 05/08  
|Gordon Hamilton                                                             |  | 54  |  | Director              |  | 05/02             |  | *      
|Michael Hannley                                                             |  | 58  |  | Director              |  | 07/07             |  | **     
|Lawrence Mulcahy                                                            |  | 58  |  | Director              |  | 05/04             |  | 05/08  
|Seymour Siegel                                                              |  | 65  |  | Director              |  | 01/06             |  | 05/09  
|                                                                            |  |    
|Gordon Hamiltons is serving pending reelection at the 2007 annual meeting. |  |    
|Michael Hannley is serving pending election at the 2007 annual meeting.     |  |    

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Each of the foregoing persons may be deemed a "promoter" of the company, as that term is defined in the rules and regulations promulgated under the Securities and Exchange Act of 1933.

Directors are elected to serve until the expiration of their term and until their successors have been elected and qualified. Officers are appointed to serve until the meeting of the Board of Directors following the next annual meeting of stockholders and until their successors have been elected and qualified.

No Executive Officer or Director of the Corporation has been the subject of any Order, Judgment, or Decree of any Court of competent jurisdiction, or any regulatory agency permanently or temporarily enjoining, barring suspending or otherwise limiting him from acting as an investment advisor, underwriter, broker or dealer in the securities industry, or as an affiliated person, director or employee of an investment company, bank, savings and loan association, or insurance company or from engaging in or continuing any conduct or practice in connection with any such activity or in connection with the purchase or sale of any securities.

No Executive Officer or Director of the corporation has been convicted in any criminal proceeding (excluding traffic violations) or is the subject of a criminal proceeding, which is currently pending.

No Executive Officer or Director of the corporation is the subject of any pending legal proceedings.



|INDEPENDENCE OF DIRECTORS
|-------------------------

The Board of Directors has adopted categorical Director Independence Standards to assist the Board of Directors in determining the independence of each director. To be considered independent, the Board of Directors must affirmatively determine that the director has no material relationship with Global Aircraft Solutions, Inc. (Global) or any of its wholly owned subsidiaries, Hamilton Aerospace Technologies, Inc, (HAT), World Jet Corporation (WJ) and Hamilton Aerospace S.A. de C.V (HATSACV). In each case, the Board of Directors broadly considers all relevant facts and circumstances, including the directors commercial, industrial, banking, consulting, legal, accounting, charitable and familial relationships, and such other criteria as the Board of Directors may determine from time to time. While the company is listed on the OTCBB, the Board believes that the definition of

independence adopted by the NASDAQ Stock Market (NASDAQ Stock Market Rule 4200) is the appropriate standard by which to measure the independence of board members. The Director Independence Standards is set forth below.

Definition of Independence

The Board of Directors of Global Aircraft Solutions, Inc. has adopted the following Director Independence Standards to assist the Board in determining the independence of a director. To be considered independent, the Board must affirmatively determine that the director has no material relationship with the Company. In each case, the Board shall broadly consider all relevant facts and circumstances, including the directors commercial, industrial, banking, consulting, legal, accounting, charitable and familial relationships. The Board shall also consider such other criteria as the Board may determine from time to time.

1) In no event will a director be considered independent if such director fails to qualify as an independent director under Rule 4200 of NASDAQ. In addition, a director will not be independent if, within the preceding three years: (i) the director was employed by the Company; (ii) an immediate family member of the director was employed by the Company; (iii) the director receives, or an immediate family member receives, more than $60,000 per year in direct compensation from the Company, other than director and committee fees and pension or other forms of deferred compensation for prior service (provided such compensation is not contingent in any way on continued service); (iv) the director was employed by or affiliated with the Companys independent auditor; (v) an immediate family member of the director was employed as a partner, principal or manager, or employed in any other professional capacity, by

 the Companys independent auditor; or (vi) a Company executive officer served on the compensation committee of a company which employed the director, or which employed an immediate family member of the director, as an executive officer.

2) In addition to the relationships described in paragraph 1, audit committee members may not (i) directly or indirectly accept any consulting, advisory or other compensatory fee from the Company or any of its subsidiaries or (ii) be an affiliated person of the Company or any of its subsidiaries. Audit committee members may receive directors fees, in the form of cash, stock, stock units, stock options or other consideration ordinarily available to directors, as well as regular benefits that other directors receive.

3) The following commercial and charitable relationships will not be considered to be material relationships that would impair a directors independence: (i) if a Company director is an executive officer or employee of another company that, during any of the past three years, made payments to, or receives payments from, the Company for property or services in an

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amount which, in any single fiscal year, is less than $1 million or two percent, whichever is greater, of such other companys annual consolidated gross revenues; (ii) if an immediate family member of a Company director is an executive officer of another company that, during any of the past three years, made payments to, or receives payments from, the Company for property or services in an amount which, in any single fiscal year, is less than $1 million or two percent, whichever is greater, of such other companys annual consolidated gross revenues; (iii) if a Company director, or an immediate family member of such director, is an executive officer of another company which is indebted to the Company in an amount which is less than five percent of such other companys total consolidated assets; and (iv) if a Company director, or an immediate family member of such director, serves as an officer, director or trustee o

f a foundation, university, charitable or other not for profit organization, and the Companys, or the Companys Foundations discretionary charitable contributions (the Companys Foundation matching of employee charitable contributions will not be included in the amount of the Foundations contributions for this purpose) to the organization, in the aggregate, are less than $200,000 or five percent, whichever is greater, of that organizations latest publicly available annual consolidated gross revenues.

4) For relationships not covered by the categorical standards in paragraphs 1 and 3, the determination of whether the relationship is material or not, and therefore whether the director would be independent or not, shall be made by the directors who satisfy the standards set forth in paragraphs 1 and 3. The Company will explain in the next proxy statement the basis for any board determination that a relationship is immaterial despite the fact that it does not meet the categorical standards set forth in paragraphs 1 and/or 3 above.

The Board shall undertake an annual review of the independence of all directors. In advance of the meeting at which this review occurs, each director shall be asked to provide the Board with full information regarding the directors (including immediate family members) business, charitable and other relationships with the Company to enable the Board to evaluate the directors independence.

Directors have an affirmative obligation to inform the Board of any material changes in their circumstances or relationships that may impact their designation by the Board as independent. This obligation includes all business, charitable and other relationships between directors (including immediate family members) and the Company and its affiliates.

For purposes of these Director Independence Standards, immediate family member includes a persons spouse, parents, children, siblings, mothers and fathers-in-law, sons and daughters-in-law, brothers and sisters-in-law, and anyone (other than domestic employees) who shares such persons home.

Application of Independence Standards

During the Board of Directors annual review of director independence, the Board of Directors considers transactions, relationships and arrangements between each director or an immediate family member of the director and Global, HAT, WJ and HATSACV. The Board of Directors also considers transactions, relationships and arrangements between each director or an immediate family member of the director and either Global, HAT, WJ and HAT SA de CV senior management. The Board of Directors performed its annual director independence review for 2007. As part of this review, the Board of Directors considered transactions relationships and arrangements between each director or immediate family member of each director of either Global, HAT, World Jet and HAT S.A. de C.V. senior management.

As a result of this review, the Board of Directors determined that 4 of our 6 current directors and director nominees are independent, and all members of the Audit Committee, the Compensation and the Nominating and Corporate Governance Committee are independent. The Board of Directors determined that Mr. Siegel, Mr. Mulcahy, Mr. Hannley and up to December 31, 2007, Mr. Hamilton met these standards and are independent. Mr. Herman and Mr. Sawyer are not considered to be independent because of their positions as Chairman and Chief Executive Officer of Global and President of Global respectively.



|CORPORATE GOVERNANCE
|--------------------

We have a long history of good corporate governance practices that has greatly aided our long-term success. The Board of Directors and management have recognized for many years the need for sound corporate governance practices in fulfilling their respective duties and responsibilities to shareholders.

Corporate Governance Guidelines.The Board of Directors has adopted Corporate Governance Guidelines, which provide the framework for the governance of our company. The Board of Directors reviews our Corporate Governance Guidelines at least annually. From time to time, the Board of Directors may revise our Corporate Governance Guidelines to reflect new regulatory requirements and evolving corporate governance practices.

30

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Business Ethics Policy.We have operated under a Business Ethics Policy for many years and are committed to conducting business in an ethical and legal manner throughout the world. Our Business Ethics Policy applies to all of our directors,officers and employees and outlines the broad principles of ethical and legal conduct embraced by Global and its subsidiaries to guide our business related conduct. Under our Business Ethics Policy, any director, officer or employee who reasonably believes or suspects that Global or any of its subsidiaries or any director, officer or employee has or is engaging in improper or illegal activities, fraud or activities that appear to be inconsistent with or in violation of the Business Ethics Policy is responsible for reporting such activities. We do not permit retaliation of any ki

nd against any person who, in good faith, reports any known or suspected improper activities pursuant to the Business Ethics Policy.





Our Business Ethics Policy and Code of Ethics include additional ethical obligations for our senior financial management (which includes our chief executive officer, our chief financial officer, and the principal financial and accounting personnel in our operating groups and corporate departments). Our senior financial management is responsible for creating and maintaining a culture of high ethical standards throughout our company to ensure the fair and timely reporting of our financial results and financial condition.

Communications with Directors.The Board of Directors has adopted a process by which shareholders and other interested parties may communicate with the non-management directors or the chairperson of any of the committees of the Board of Directors by e-mail or regular mail. You may send communications by e-mail todhamilton@hamaerotech.com. You may also send communications by regular mail to the attention of the Chairperson, Audit Committee; Chairperson, Compensation Committee; or Chairperson, Nominating and Corporate Governance Committee; or to the non-management directors as a group to the Non-Management Directors, each c/o Corporate Secretary, Global Aircraft Solution

s, Inc., 6901 S. Park Ave., Tucson, AZ 85706.

Globals management will review all communications received to determine whether the communication requires immediate action. Management will pass on all communications received, or a summary of such communications, to the appropriate director or directors.

Complaint Procedures for Accounting, Auditing and Financial Related Matters.The Audit Committee has established procedures for receiving, retaining and treating complaints from any source regarding accounting, internal accounting controls and auditing matters. The Audit Committee has also established procedures for the confidential, anonymous submission by employees of concerns regarding questionable accounting or auditing matters. Interested parties may communicate such complaints by following the procedures described under the heading Communications with Directors, above. Employees may report such complaints by following the procedures outlined in the Business Ethics Policy or the companys Whistleblower Policy. We do not permit any retaliation of any kind against any person who, in good faith, submits a complaint

 or concern under these procedures.

Independence of Directors.Under our Director Independence Standards as set forth above, 4 of our current 6 directors are independent and both of our two director nominees are independent. In addition, all members of the Audit Committee, the Compensation Committee, and the Nominating and Corporate Governance Committee are independent.

Executive Sessions.The non-management members of the Board of Directors meet at least three times each year in regularly scheduled executive sessions. Additional executive sessions may be scheduled by the non-management directors. The chairpersons of the Audit Committee, the Compensation Committee, and the Nominating and Corporate Governance Committee rotate presiding over these sessions.

Annual Board Self-Assessments.The Board of Directors has instituted annual self-assessments of the Board of Directors, as well as the Audit Committee, the Compensation and the Nominating and Corporate Governance Committee, to assist in determining whether the Board of Directors and its committees are functioning effectively. In early 2007, the Board and each of its committees completed self-evaluations and reviewed and discussed the results. The Nominating and Corporate Governance Committee oversees this evaluation process.

Board Committee Charters.The Board of Directors has adopted written charters for the Audit Committee, the Compensation Committee and the Nominating and Corporate Governance Committee. Each committee reviews and evaluates the adequacy of its charter at least annually and recommends any proposed changes to the Board of Directors for approval.

Availability of Corporate Governance Materials.You may access all committee charters, our Articles of Incorporation and By-Laws, our Director Independence Standards, our Business Ethics Policy and other corporate governance materials in the Corporate Governance section of our website atwww.globalaircraftsolutions.com. You also may receive copies without charge by writing to us at: Global Aircraft Solutions, Inc., 6901 S. Park Ave., Tucson, AZ 85706 Attention: Investor Relations.

BOARD MEETINGS AND COMMITTEE MEMBERSHIP

The Board of Directors held four meetings during 2007. Each director attended at least 75% of the meetings of the Board of Directors and committees on which he or she served. Each director is expected to attend, absent unusual circumstances, all annual and special meetings of shareholders.

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The Board of Directors has established an Audit Committee, a Compensation Committee, and a Nominating and Corporate Governance Committee. The Board of Directors has adopted a written charter for each of these committees. You can find a complete copy of each committee charter in the Corporate Governance section of our website atwww.globalaircraftsolutions.com. The following table sets forth the current membership of these committees.

|                 |  |           |  |              |  |                     
|---------------- |  | --------- |  | ------------ |  | --------------------
|Name             |  | Audit     |  | Compensation |  | Nominating &        
|                 |  |           |  |              |  | Corporate Governance
|                 |  |           |  |              |  |                     
|Seymour Siegel   |  | X (Chair) |  | X            |  | X                   
|Lawrence Mulcahy |  | X         |  | X            |  | X (Chair)           
|Michael Hannley  |  | X         |  | X (Chair)    |  | X                   

Audit Committee.The purpose of the Audit Committee is to assist the Board of Directors in fulfilling the Board of Directors oversight responsibilities on matters relating to:

- the integrity of our financial statements;
- the independent registered public accounting firms qualifications and independence;
- the performance of our internal audit function and independent registered public accounting firm;
- our compliance with legal and regulatory requirements;
- preparing the report required by the rules of the SEC to be included in our annual proxy statement; and
- engaging in such other matters as may from time to time be specifically delegated to the Committee by the Board of Directors.

The Audit Committee met four times during 2007. Each member of the Committee is independent as defined in the corporate governance listing standards of NASDAQ and our Director Independence Standards. The Board of Directors has determined that Mr. Siegel is an audit committee financial expert, as that term is defined by SEC regulations.

Compensation and Management Development Committee.The purpose of the Compensation and Committee is to assist the Board of Directors in fulfilling the Board of Directors oversight responsibilities on matters relating to:

- compensating our management, which includes our executive officers;
- overseeing our management succession planning;
- producing a compensation committee report required by the rules of the SEC to be included in our annual proxy statement; and
- engaging in such other matters as may from time to time be specifically delegated to the Committee by the Board of Directors.

The Compensation Committee met four times during 2007. Each member of the Committee is independent as defined in the corporate governance listing standards of NASDAQ and our Director Independence Standards.

Process for Determining Director and Executive Compensation.The Committee reports to the Board of Directors on all compensation matters regarding our directors, executive officers and other key salaried employees. The Committee annually reviews and approves the compensation for our directors, executive officers and other key salaried employees. The Committee does not generally delegate any of its authority to other persons, although it has the power to delegate authority to subcommittees. The Committee relies upon our executive officers and other employees in order to assist the Committee in performing its duties.

As explained in more detail under the heading Compensation Discussion and Analysis, we generally want to pay our executive officers compensation that is competitive in the marketplace. Likewise, we also want to pay our directors competitive compensation. Our Director of Human Resources and his staff usually work directly with the Compensation Committee to compile the market compensation information. We use that information as a starting point to set compensation levels for our directors and executive officers.

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The Committee relies upon our Director of Human Resources and his staff for input in setting director and executive officer compensation levels. Our Director of Human Resources may also make recommendations to the Committee for director compensation. With regard to executive officer compensation, management generally makes recommendations to the Committee and plays a more active role in the compensation setting process, including the evaluation of executive officer performance and making recommendations with regard to salary levels, annual cash incentive compensation, long-term annual compensation awards (restricted stock and stock options) and other employee benefits.

Prior to providing recommendations to the Committee at its formal meetings, our Director of Human Resources generally will meet with our Chief Executive Officer to review the recommendations, except for recommendations concerning our Chief Executive Officers compensation. Our Chief Executive Officer and our Director of Human Resources also will meet with the Chair of the Committee prior to Committee meetings to review the agenda for the meeting and the compensation recommendations. Our Chief Executive Officer and our Director of Human Resources generally attend all Committee meetings. Our Director of Human Resources serves as secretary for the Committee at its meetings. Our Chief Executive Officer is excused from that part of the meeting during which the Committee discusses his annual performance evaluation and compensation.

Nominating and Corporate Governance Committee.The purpose of the Nominating and Corporate Governance Committee is to assist the Board of Directors in fulfilling the Board of Directors oversight responsibilities on matters relating to:

- identifying individuals qualified to become members of the Board of Directors;
- recommending to the Board of Directors the director nominees for election as directors;
- recommending to the Board of Directors the director nominees for each committee of the Board of Directors;
- reviewing, developing and recommending to the Board of Directors a set of corporate governance guidelines;
- guiding the Board of Directors in its annual evaluation of the Board of Directors performance; and
- engaging in such other matters as may from time to time be specifically delegated to the Committee by the Board of Directors.

The Nominating and Corporate Governance Committee met two times in 2007. Each member of the Committee is independent as defined in the corporate governance listing standards of NASDAQ and our Director Independence Standards.

Director Qualifications.The Committee seeks a diverse group of candidates who possess the appropriate characteristics, skills, experience and time to make a significant contribution to the Board of Directors, Global and our shareholders. Each candidate will be evaluated in the context of the Board of Directors as a whole, with the objective that the Board of Directors can best perpetuate Globals success and represent shareholders interests through the exercise of sound business judgment using the directors diversity of experiences. Each candidate shall have the highest personal and professional character and integrity, and shall have demonstrated exceptional ability and judgment in their respective endeavors. Candidates must possess sufficient time to effectively carry out their duties and responsibilities.<

/P>

In considering the composition of the Board of Directors as a whole, the Board of Directors considers the following skills and experiences of each individual candidate

- Management;
- Financial Expertise;
- Marketing, Sales; and
- Aviation Experience

In addition, the Board of Directors considers such other skills and experiences, as it deems appropriate given the then-current needs of the Board of Directors and Global.

The Committee may employ professional search firms (for which it would pay a fee) to assist it in identifying potential members of the Board of Directors with the desired skills and disciplines.

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Consideration of Candidates Recommended by Shareholders.The Committees policy with respect to the consideration of director candidates recommended by shareholders is that the Committee will consider such candidates on the same basis and in the same manner as it considers all director candidates. Recommendations are required to include information about the background and qualifications of the candidate. You may find a description of these requirements in the Corporate Governance section of our website atwww.globalaircraftsolutions.com. Shareholders may submit recommendations, along with proof of shareholder status, in writing to Chairperson, Nominati

ng and Corporate Governance Committee, c/o Corporate Secretary, Global Aircraft Solutions, Inc., 6901 S. Park Ave., Tucson, AZ 85706.



|BIOGRAPHICAL INFORMATION
|------------------------

The following is a brief account of the business experience during at least the past five years of each person who is a director and executive officer at the time of filing this report, indicating the principal occupation and employment during that period, and the name and principal business of the organization in which such occupation and employment were carried out.

Ian Herman: CEO/CFO/Chairman. From 2002 through the present, Mr. Herman has served as the CEO/CFO and Chairman of Global Aircraft Solutions, Inc. and its subsidiaries. As of June 1, 2006, Mr. Herman resigned from his position as CFO when the Company hired Mr. Sankar to assume this position. From June 1, 2006 through the present, Mr. Herman has served as CEO and Chairman of the Company. From 2000 through the present, Mr. Herman has been the President of The Financial Capital, Inc., which is engaged in financial and business consulting. From 1995-2000, Mr. Herman was Chairman and a Board Member for the British government handling major inward investments into the United Kingdom as well as administering and evaluating projects in diverse industries totaling more than $200,000,000. During his tenure with the British government, Mr. Herman was awarded

 the Freedom of the City of London in recognition of his services. During the period of 19901999, Mr. Herman was the Chief Executive Officer of his own accounting and business consulting business specializing in publishing, healthcare, telecommunications, airlines, manufacturing and information technology. From 1988-1990 Mr. Herman was Chairman and Chief Executive Officer for British World Airlines Limited.

John B. Sawyer: President, Chief Operating Officer and Director.From May 2002 through the present, Mr. Sawyer has been the President of Global Aircraft Solutions, Inc. From 1998 through May 6, 2002, John Sawyer was Chief Operating Officer of Hamilton Aviation, Inc. From 1996 until 1997, Mr. Sawyer was president of Matrix Aeronautica S.A. de C.V., a Mexican repair station located in Tijuana, Baja California. John received an A.A. in Aerospace Engineering from the University of Texas (Austin). In 1986 John joined Pan American World Airways based in Berlin, Germany. Subsequent to that he worked as a Production Foreman at Raytheon, a Quality Control Supervisor at TIMCO, a Heavy Maintenance Re

presentative for World Airways, and Director of Quality Control at Federal Express Feeder.

Patricia Graham,Chief Accounting Officer. Since 1995, Patricia Graham has been associated with the aviation industry serving as Divisional Controller for IAC Complete Controls, Inc., as Regional Controller for American Aircarriers Support, Inc., and as Controller and Corporate Officer for Evergreen Air Center, Inc. prior to joining HAT. Ms. Graham graduated Summa Cum Laude from the University of Arizona with a B.S. in Business Administration. Ms. Graham has over 30 years experience in accounting, fiscal planning and budgetary operations, as well as 5 years public accounting experience.

Gordon D. Hamilton: Director. Gordon is the son of Hamilton Aviation founder, Gordon B. Hamilton, and literally grew up in the aviation business. Mr. Hamilton joined Hamilton Aviation full time as Vice President, Marketing after graduating with honors from the University of Chicago in 1978 with a BA in Tutorial Studies. Gordon became President and Chief Executive Officer of Hamilton Aviation in 1993; a position that he held until joining Hamilton Aerospace in 2003.

Lawrence Mulcahy:Director. Since 1988, Mr. Mulcahy has served as the President of L.L. Industries, d/b/a Davis Kitchens. Davis Kitchens is a wholesale distributor of cabinetry for commercial and residential use. Since 1994, Mr. Mulcahy has served as the President of Becker Specialties and Manufacturing in Tucson, AZ, a manufacturer of plastic laminate countertop blanks. Mr. Mulcahy has also been a partner in Davis Kitchens since 1994. Mr. Mulcahy received his B.S. in Economics from the University of Arizona and was a member of the United States Air Force prior to attending college.

Seymour Siegel:Director. Mr. Siegel is a principal in the business consulting group of Rothstein, Kass & Company, P.C. Rothstein, Kass & Company is a national firm of accountants and consultants with over 900 members and offices in 8 cities. Mr. Siegel was managing partner and founder of Siegel Rich and Co., P.C., which merged into Weiser & Co., LLP, a large regional firm where he was a senior partner until forming Siegel Rich Inc. in 1994, which in April 2000, became a division of Rothstein Kass. Mr. Siegel is also currently the Chairman of the Audit Committee of Hauppauge Digital, Inc., Emerging Vision, Inc., and Air Industries Group, Inc.

Michael Hannley:Director. Mr. Hannley is a local Tucsonan with 35 years banking experience and is currently the President and CEO of the Bank of Tucson, which he founded in 1996. From August 1986 until December 1995, Mr. Hannley was the Senior Vice President for National Bank of Arizona. From May 1981 until June 1986,

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Mr. Hannley was employed by Great American Savings, he was the Divisional Vice President beginning in May 1981 and assumed the duties of Senior Vice President Administration in June 1986. Prior to his employment with Great American Savings, Mr. Hannley was employed as the Regional Vice President of Southern Arizona Bank/First Interstate Bank from July 1972 through May 1981. Mr. Hannley presently serves on the following corporate and community Boards of Directors: Capitol Bancorp Limited (a multi-state bank holding company); University of Arizona Foundation  Vice Chair; Tucson Airport Authority; Bank of Santa Barbara; American Bankers Association; Pima County Trust Fund Board of Trustees; University of Arizona Intercollegiate Athletics Rebounders Board Dm 50; the Assistance League of Tucson, Inc. Community Advisory Committee; University of Arizona Department of Biochemistry and Molecular Biophysics Board.



|Family Relationships
|--------------------

There are no family relationships between any directors or executive officers.



|SIGNIFICANT EMPLOYEES
|---------------------

The following persons are considered significant employees of our HAT subsidiary:

Gordon D. Hamilton, Chief Executive Officer, Hamilton Aerospace Technologies, Inc., Biography above.

Alan R. Abate,Vice President and Senior Corporate Officer.Mr. Abate started his aviation career in 1976 at Hamilton Aviation. During his early years, he earned his FAA Airframe and Power plant certificates and honed his skills in transport category aircraft repair, maintenance and modification. In 1986, Mr. Abate joined the management team at Hamilton Aviation. Working days and going to school at night, he earned an Advanced Certificate and AAS degree, with honors, in Business Administration from Pima College in Tucson, Arizona. Since joining HAT shortly after its inception in April 2002, Mr. Abate has been responsible for contract management and corporate administration includ

ing human resources and information systems for Hamilton Aerospace.

David T. Querio,Vice President of Operations, Hamilton Aerospace.Mr. Querio joined the Company in May 2004 and brings with him over 21 years of aviation industry maintenance and maintenance management experience. Prior to joining HAT, Mr. Querio was Vice President of Operations for a large FAR145 Repair Station supervising in excess of 450 personnel. Prior to this, Mr. Querio served as Vice President, General Manager of the AMS Goodyear, AZ facility; Vice President, Engineering and Maintenance for Mesa Airlines; Vice President, Maintenance for Mahalo Airlines and Vice President; Customer Support, Planning and Sales for West Virginia Air Center. Mr. Querio also worked for American Airlines for nine years in numerous mechanical and management positions.<

/P>

The following persons are considered significant employees of our World Jet, Inc subsidiary:

Gordon D. Hamilton,Chief Executive Officer, World Jet Corporation, Biography above.

Tina Longo,Vice President of Outside Sales & Purchasing.Native Tucsonan, 30 years in the Aviation Parts industry, 15 years with the Hamilton repair station organization as Director of purchasing/materials. Prior positions with Lockheed Aerospace, Intertech Aviation, Dynair Corp, and Gates LearJet.



|Exclusion of Director Liability
|-------------------------------

Pursuant to the General Corporation Law of Nevada, Global's Certificate of Incorporation excludes personal liability on the part of its directors to Global for monetary damages based upon any violation of their fiduciary duties as directors, except as to liability for any acts or omissions which involve intentional misconduct, fraud or a knowing violation of law or for improper payment of dividends. This exclusion of liability does not limit any right which a director may have to be indemnified and does not affect any director's liability under federal or applicable state securities laws.



|Code of Ethics
|--------------

We have adopted a Code of Ethics and Business Ethics Policy, which apply to all of our directors, officers and employees. Our Business Ethics Policy includes additional ethical obligations for our senior financial management (which includes our chief executive officer, our chief financial officer, and the controller, treasurer and principal financial and accounting personnel in our operating groups and corporate departments). Our Business Ethics Policy is available in the Corporate Governance section of our website atwww.globalaircraftsolutions.comas is our Code of Ethics.

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Audit Committee and Financial Expert

Our board of directors has determined that Seymour Siegel is an audit committee financial expert as that term is defined by SEC Regulations. We have separately designated a standing audit committee. Michael Hannley, Lawrence Mulcahy and Seymour Siegel are independent directors as that term is defined by our Director Independence Standards and are members of our audit committee.

ITEM 10.    EXECUTIVE COMPENSATION

Global currently has in place an employee stock compensation plan and a compensatory stock option plans. Global has no long-term incentive plans, as that term is defined in the rules and regulations of the Securities and Exchange Commission. There are no other compensatory or benefit plans, such as retirement or pension plans, in effect or anticipated to be adopted at this time, although in the future the Board of Directors may adopt other plans.

|                           |  |      |  |         |  |                            |   |  |         |  |        |  |                |  |               |  |              |  |        
|-------------------------- |  | ---- |  | ------- |  | -------------------------- | - |  | ------- |  | ------ |  | -------------- |  | ------------- |  | ------------ |  | -------
|                           |  |      |  |         |  | SUMMARY COMPENSATION TABLE |   |  |         |  |        | 
|                          
|                           |  |      |  |         |  |                            |   |  |         |  |        |  |                |  | Change in     |  |              |  |        
|                           |  |      |  |         |  |                            |   |  |         |  |        |  |                |  | Pension       |  |              |  |        
|                           |  |      |  |         |  |                            |   |  |         |  |        |  |                |  | Value and     |  |              |  |        
|                           |  |      |  |         |  |                            |   |  |         |  |        |  |                |  | Non-qualified |  |              |  |        
|                           |  |      |  |         |  |                            |   |  |         |  |        |  | Non-equity     |  | Deferred      |  |              |  |        
|Name and                   |  |      |  |         |  |                            |   |  | Stock   |  | Option |  | Incentive Plan |  | Compensation  |  | All Other    |  |        
|Principal                  |  |      |  | Salary  |  | Bonus                      |   |  | Awards  |  | Awards |  | Compensation   |  | Earnings      |  | Compensation |  |        
|Position                   |  | Year |  | $       |  | $                          |   |  | $       |  | $      |  | $              |  | $             |  | $            |  | Total $
|                          
|Ian Herman,                |  | 2007 |  | 165,577 |  | 50,000                     | * |  |         |  |        |  |                |  |               |  | 3,000        |  | 218,577
|Chairman &                 |  |      |  |         |  |                            |   |  |         |  |        |  |                |  |               |  |              |  |        
|CEO                        |  |      |  |         |  |                            |   |  |         |  |        |  |                |  |               |  |              |  |        
|                          
|                           |  | 2006 |  | 150,967 |  | 40,000                     |   |  |         |  |        |  |                |  |               |  | 5,000        |  | 195,967
|                          
|John B                     |  | 2007 |  | 339,997 |  | 95,000                     | * |  |         |  |        |  |                |  |               |  | 22,000       |  | 456,997
|Sawyer,                    |  |      |  |         |  |                            |   |  |         |  |        |  |                |  |               |  |              |  |        
|President &                |  |      |  |         |  |                            |   |  |         |  |        |  |                |  |               |  |              |  |        
|COO                        |  |      |  |         |  |                            |   |  |         |  |        |  |                |  |               |  |              |  |        
|                          
|                           |  | 2006 |  | 237,500 |  | 80,000                     |   |  |         |  |        |  |                |  |               |  | 25,000       |  | 342,500
|                          
|Alan Abate,                |  | 2007 |  | 134,991 |  | 17,500                     | * |  | 120,000 |  |        |  |                |  |               |  |              |  | 272,491
|Sr. VP                     |  |      |  |         |  |                            |   |  |         |  |        |  |                |  |               |  |              |  |        
|Administration             |  |      |  |         |  |                            |   |  |         |  |        |  |                |  |               |  |              |  |        
|@ HAT                      |  |      |  |         |  |                            |   |  |         |  |        |  |                |  |               |  |              |  |        
|                          
|                           |  | 2006 |  | 124,077 |  | 12,500                     |   |  |         |  |        |  |                |  |               |  |              |  | 136,577
|                          
|*Awarded in 2007 for 2006. |  |      |  |         |  |                            |   |  |         |  |        |  |                |  |              



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OPTION/SAR GRANTS IN LAST FISCAL YEAR

|               |  |  |  |                      |  |  |  | Individual Grants    |  |   |                  |  |  |  |                
|-------------- |  |  |  | -------------------- |  |  |  | -------------------- |  | - | ---------------- |  |  |  | ---------------
|               |  |  |  |                      |  |  |  |                      |  |   |                  |  |  |  |                
|               |  |  |  |                      |  |  |  |                      |  |   |                  |  |  |  |                
|(a)            |  |  |  | (b)                  |  |  |  | (c)                  |  |   | (d)              |  |  |  | (e)            
|               |  |  |  |                      |  |  |  |                      |  |   |                  |  |  |  |                
|Name           |  |  |  | Number of Securities |  |  |  | % of Total           |  |   | Exercise or Base |  |  |  | Expiration Date
|               |  |  |  | Underlying           |  |  |  | Options/SARs        |  |   | Price ($/Sh)     |  |  |  |                
|               |  |  |  | Options/SAR's        |  |  |  | Granted to Employees |  |   |                  |  |  |  |                
|               |  |  |  | Granted              |  |  |  | in Fiscal Year       |  |   |                  |  |  |  |                
|              
|Seymour Siegel |  |  |  | 10,000               |  |  |  | 100                  |  | $ | 1.05             |  |  |  | 3/07/2012      

AGGREGATED OPTIONSAR EXERCISES IN LAST FISCAL YEAR and FISCALYEAR-END OPTION/SAR VALUES

|                 |  |                    |  |                    |  |  |  |             |  |              
|---------------- |  | ------------------ |  | ------------------ |  |  |  | ----------- |  | -------------
|(a)              |  | (b)                |  | (c)                |  |  |  | (d)         |  | (e)          
|Name             |  | Shares Acquired on |  | Value Realized ($) |  |  |  | Exercisable |  | Unexercisable
|                 |  | Exercise           |  |                    |  |  |  |             |  |              
|                 |  |                    |  |                    |  |  |  |             |  |              
|Ian Herman       |  | None               |  | N/A                |  |  |  | 133,334     |  | N/A          
|John B. Sawyer   |  | None               |  | N/A                |  |  |  | 766,666     |  | N/A          
|Seymour Siegel   |  | None               |  | N/A                |  |  |  | 20,000      |  | N/A          
|Alfredo Mason    |  | None               |  | N/A                |  |  |  | 10,000      |  | N/A          
|Lawrence Mulcahy |  | None               |  | N/A                |  |  |  | 10,000      |  | N/A          

2002 Compensatory Stock Option Plan

Global has adopted the 2002 Compensatory Stock Option Plan for officers, employees, directors and advisors (the "2002 CSO Plan"). The shareholders have not yet approved this plan however, under our by-laws the directors are empowered to issue options and shares under the plan. Global has reserved a maximum of 3,000,000 Common Shares to be issued upon the exercise of options granted under the 2002 CSO Plan. The 2002 CSO Plan will not qualify as an "incentive stock option" plan under Section 422A of the Internal Revenue Code of 1986, as amended. The Board of Directors or other plan administrator will grant options under the 2002 CSO Plan at exercise prices to be determined. With respect to options granted pursuant to the 2002 CSO Plan, optionees will not recognize taxable income upon the grant of options granted at or in excess of fair market value. Global will be entitled to a compensating deduction (which it must expense) in an a

mount equal to any taxable income realized by an optionee as a result of exercising the option. The Board of Directors administers the 2002 CSO Plan. Options to purchase an aggregate of 1,045,000 shares of Global common stock have been granted under the 2002 CSO Plan. Options to purchase 940,000 shares were outstanding at December 31, 2007.

2003 Employee Stock Compensation Plan

Global has adopted the 2003 Employee Stock Compensation Plan for officers, employees, directors and advisors (the "2002 ESC Plan"). The shareholders have not yet approved this plan however, under our by-laws the directors are empowered to issue options and shares under the plan. Global has reserved a maximum of 5,000,000 Common Shares to be issued upon the grant of awards under the ESC Plan. Employees will recognize taxable income upon the grant of Common Stock equal to the fair market value of the Common Stock on the date of the grant and Global will recognize a compensating deduction at such time. The Board of Directors administers the ESC Plan. 4,987,500 shares of Common Stock available under the ESC Plan have been awarded and 4,987,500 shares had been issued at December 31, 2007.

37

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|Compensation of Directors
|-------------------------

On March 27, 2006, the Compensation Committee agreed that as of the next ratification of the Board of Directors of the shareholders all outside directors shall receive uniform compensation. All outside directors shall receive a one-time award of 10,000 shares plus options for 10,000 shares upon their election. Thereafter, each shall receive an additional award of 10,000 shares plus options for 10,000 shares upon successful completion of each year of service. In addition to the award shares each member shall receive an annual retainer of $20,000. Each Audit Committee member shall receive an additional annual retainer of $6,000, while each Compensation Committee member shall receive an additional annual retainer of $4,000. All Board members shall be paid a fee of $1,000 for each scheduled meeting attended. Audit committee members will be paid a fee of $1,000 for each scheduled Audit Committee meeting attended. Compensation Committe

e members shall be paid a fee of $500 for each scheduled Compensation Committee meeting attended.

ITEM 11. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS.

Principal Stockholders

The following table sets forth, as of January 8, 2008, the stock ownership of each officer and director of Global, of all officers and directors of Global as a group, and of each person known by Global to be a beneficial owner of 5% or more of its Common Stock, $.001 par value per share. Except as otherwise noted, each person listed below is the sole beneficial owner of the shares and has sole investment and voting power of such shares. No person listed below has any option, warrant or other right to acquire additional securities of Global, except as noted. The following calculations are based upon the Companys authorized, issued and outstanding common stock of 40,181,301 as of January 8, 2008.

|                                             |  |                  |    |   |  |                      | 
|-------------------------------------------- |  | ---------------- | -- | - |  | -------------------- | 
|NAME AND ADDRESS OF                          |  | AMOUNT OF COMMON |    |   |  | PERCENT OF COMMON    | 
|BENEFICIAL OWNER                             |  | STOCK OWNED      |    |   |  | STOCK OUTSTANDING(1) | 
|                                             |  | BENEFICIALLY     |    |   |  |                      | 
|                                            
|Ian M. Herman                                |  | 2,496,834        | (2 | ) |  | 6.19%                | 
|                                            
|John B. Sawyer                               |  | 2,416,666        | (3 | ) |  | 5.90%                | 
|                                            
|Lawrence Mulcahy                             |  | 130,000          | (4 | ) |  | *                    | 
|                                            
|Seymour Siegel                               |  | 40,000           | (5 | ) |  | *                    | 
|                                            
|All Directors and Executive Officers as a    |  | 5,083,500        |    |   |  | 12.37%               | 
|Group                                        |  |                  |    |   |  |                      | 
|                                            
|* Represents an individual as the beneficial |  |                  |    |   |  |                      | 
|owner of less than 1% of the outstanding     |  |                  |    |   |  |                      | 
|common stock                                 |  |                  |    |   |  |                      | 
|                                            
|Barron Partners                              |  | 7,200,000        | (6 | ) |  | 15.20%               | 
|730 Fifth Ave.                               |  |                  |    |   |  |                      | 
|9thFloor                                     |  |                  |    |   |  |                      | 
|New York, NY 10019                           |  |                  |    |   |  |                      | 
|                                            
|                                            
|Ewing & Partners                             |  | 5,031,425        | (7 | ) |  | 12.52%               | 
|4514 Cole Ave.                               |  |                  |    |   |  |                      | 
|Suite 808                                    |  |                  |    |   |  |                      | 
|Dallas, TX 75205                             |  |                  |    |   |  |                      | 
|                                            
|                                            
|Contrarian Capital Management, LLC           |  | 4,000,000        | (8 | ) |  | 9.95%                | 
|411 West Putnam Ave.                         |  |                  |    |   |  |                      | 
|Suite 225                                    |  |                  |    |   |  |                      | 
|Greenwich, CT 06830                          |  |                  |    |   |  |                      | 

38

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|                                    |  |           |     |   |  |       | 
|----------------------------------- |  | --------- | --- | - |  | ----- | 
|Delta Offshore                      |  | 3,000,000 | (9  | ) |  | 7.47% | 
|900 Third Ave.                      |  |           |     |   |  |       | 
|5thFloor                            |  |           |     |   |  |       | 
|New York, NY 10022                  |  |           |     |   |  |       | 
|                                   
|                                   
|Doucet Capital, LLC                 |  | 2,706,899 | (10 | ) |  | 6.74% | 
|2204 Lakeshore Drive, Suite 218     |  |           |     |   |  |       | 
|Birmingham, AL 35209                |  |           |     |   |  |       | 
|                                   
|Cross River Capital Management, LLC |  | 2,044,602 | (11 | ) |  | 5.09% | 
|411 West Putnam Ave.                |  |           |     |   |  |       | 
|Suite 225                           |  |           |     |   |  |       | 
|Greenwich, CT 06830                 |  |           |     |   |  |       | 

|1 | Percent of common stock is based on 40,181,301 shares of common stock issued and outstanding on January 8, 2008 with beneficial ownership being determined in accordance with the rules of the SEC and including voting or investment power with respect to securities. Securities beneficially owned by a person may include securities owned by or for, among others, the spouse, children or certain other relatives residing with such person as well as other securities as to which the person has or shares voting or investment power or has the option or right to acquire within 60 days of January 8, 2008. Percent of Class Owned is based on the 40,181,301 shares of common stock issued and outstanding on January 8, 2008 plus any shares that may be acquired by the stockholders as a result of the exercise of existing options or warrants within 60 days after January 8, 2008.
|- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| 
|2 | Includes 133,334 shares of common stock issuable to Mr. Herman upon the exercise of options at $.17 per share which expire May 13, 2008. Based on the December 31, 2006 Schedule 13G filed by Rochdale Investment Management, LLC, all shares of common stock, exclusive of the 133,334 shares underlying an option, are held in trust by Rochdale Investment Management, LLC as the trustee for the Herman Family Trust. Of the total shares, Rochdale Investment Management Group has sole voting and dispositive power over 2,313,500 shares.                                                                                                                                                                                                                                                                                                                                                      
| 
|3 | Includes 766,666 shares of common stock issuable to Mr. Sawyer upon the exercise of options at $.17 per share which expire May 13, 2008.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
| 
|4 | Includes 10,000 shares of common stock issuable to Mr. Mulcahy upon exercise of options at $1.03 per share which expires August 24, 2011.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
| 
|5 | Includes 20,000 shares of common stock issuable to Mr. Siegel upon exercise of options granted. 10,000 shares at an exercise price of $1.03 which expires August 24, 2011 and 10,000 shares at an exercise price of $1.05 per share which expires on March 8, 2012                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
| 
|6 | All shares of common stock underlying a warrant that may be acquired by the exercise of a $1.36 warrant which expires May 31, 2009.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
| 
|7 | In setting forth this information, the Company relied upon the February 6, 2008 Schedule 13D filing of Ewing & Partners, Timothy Ewing, Ewing Asset Management, LLC, Endurance General Partners, LP, Endurance Partners (Q.P.), L.P. and Endurance Partners, L.P. Of the total shares, Ewing & Partners, Timothy Ewing, Ewing Asset Management, LLC, Endurance General Partners, LP had sole voting and dispositive power over all the shares.                                                                                                                                                                                                                                                                                                                                                                                                                                                        
| 
|  | Endurance Partners (Q.P.), L.P. had sole voting and dispositive power over 3,594,703 shares, Endurance Partners, L.P. had sole voting and dispositive power over 1,436,722 shares and there is no shared voting or dispositive power.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
| 
|8 | In setting forth this information, the Company relied upon the August 8, 2005 Schedule 13G filing of Contrarian Capital Management,. Of the total shares, Contrarian Capital management, LLC had shared voting and dispositive power over all the shares and Contrarian Equity Fund, LP had shared voting and dispositive power over 3,355,669 shares. No amendments have been filed to this Schedule 13G.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
| 
|9 | In setting forth this information, the Company relied upon the August 10, 2005, joint filing of Schedule 13G of Delta Offshore, Ltd. and Trafelet & Company, LLC. Of the total shares, Trafelet & Company had shared voting and dispositive power over all the shares and reporting entity Delta Offshore, Ltd. had shared voting and dispositive power over 1,599,900 shares. No amendments have been filed to this Schedule 13G.                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
| 

39

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|10 | In setting forth this information, the Company relied upon the January 2, 2008 filing of Schedule 13D of Doucet Capital, LLC, Doucet Asset Management, LLC, Christopher L. Doucet and Suzette A. Doucet. Of the total shares, Doucet Capital, LLC, Doucet Asset Management, LLC, Christopher Doucet (managing member of Doucet Capital, LLC and CEO of Doucet Asset Management) and Suzette Doucet (member of Doucet Capital and CFO of Doucet Asset Management) had shared voting and dispositive power over all the shares. Doucet Capital, LLC is listed as a holding company which owns Doucet Asset Management, LLC, a SEC registered investment advisor firm. No amendments have been filed to this Schedule 13D.
|-- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|  
|11 | In setting forth this information, the Company relied upon the December 31, 2007 filing of Schedule 13G of Cross River Capital Management, LLC, Cross River Partners LP and Richard Murphy. Of the total shares, Cross River Capital Management, LLC has shared voting and dispositive power over all the shares, Cross River Partners LP has shared voting and dispositive power over all the shares and Richard Murphy has sole voting power over 81,500 of the shares and shared voting and dispositive power over 2,044.062 of the shares. No amendments have been filed to this Schedule 13G.                                                                                                                     
|  

ITEM 12.    CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS.

There were no transactions, or series of transactions, for the years ended December 31, 2007 and 2006 to which Global was a party, in which the amount exceeds $120,000, and in which to the knowledge of Global, any director, executive officer, nominee, five percent or greater shareholder, or any member of the immediate family of any of the foregoing persons, have or will have any direct or indirect material interest.

ITEM 13.    EXHIBITS.

(a)
     Exhibits. The following exhibits are filed with this report, except those indicated as having previously been filed with the Securities and Exchange Commission and incorporated by reference to another report, registration statement or form.(b)
     As to any shareholder of record requesting a copy of this report, Global will furnish any exhibit indicated in the list below as filed with report upon payment to Global of its expenses in furnishing the information.


2.1 Stock Exchange Agreement and Plan of Reorganization dated April 12, 2002, among the Company, JSC and the shareholders of JSC, incorporated by reference to Exhibit 2.1 to Form 8-K dated May 1, 2003 ...............1

2.1 Stock Exchange Agreement and Plan of Reorganization dated April 30, 2002, among the Company, HAT and the shareholders of HAT, incorporated by reference to Exhibit 2.1 to Form 8-K dated May 3, 2003. .........................1

3.1 Articles of Incorporation of Renegade Venture Corporation, incorporated by reference to Exhibit 3.1 to registration statement on Form S-18, file No. 33-30476 dated August 11, 1989 1 3.2 Bylaws of Renegade Venture Corporation, incorporated by reference to Exhibit 3.2 to registration statement on form S-18, file No.33-30476 dated August 11, 1989 ..................1

3.5 Amendment to Articles of Incorporation of RenegadeVenture Corporation, incorporated by reference from Exhibit 3.5 to Form 8-K dated August 16, 1996............... 1

3.6 Articles and Certificate of Merger dated September 18, 1997, between Renegade Venture Corporation andRenegade Venture (Nev.) Corporation, a Nevada corporation, with Merger Agreement attached thereto as Exhibit A, incorporated by reference to Exhibit 2.1 to Form 8-K dated October 2, 1997. ..................1

3.7 Certificate of Incorporation of Renegade Venture (Nev.) Corporation, incorporated by reference to Exhibit 3.1 to Form 8-K old-fashioned October 2, 1997 ...............1

3.8 Bylaws of Renegade Venture (Nev.) Corporation, incorporated by reference to Exhibit 3.2 to Form 8-K dated October 2, 1997 ............1

3.9 Articles of Incorporation of Johnstone SoftMachine Corporation, incorporated by reference to Exhibit 3.1 to Form 8-K dated May 1, 2003 ...................1

3.11 Articles of Incorporation of Hamilton Aerospace Technologies, Inc., incorporated by reference to Exhibit 3.1 to Form 8-K dated May 3,2003 .....................1

3.12 Bylaws of Hamilton Aerospace Technologies, Inc., incorporated by reference to Exhibit 3.2 to Form 8-K dated May 3, 2003 .................1

3.13 Amendment to Articles of Incorporation/By-Laws incorporated by reference to Form 8-K dated 12/16/04............. 1

40

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3.14 Amended and Restated Articles of Incorporation of Global dated December 10, 2004 incorporated by reference to the SB-2 registration effective February 8, 2006

14.1 Code of Ethics........................1

21.1 Subsidiaries of the Registrant..2

23.1 Consent of Independent Registered Public Accounting Firm ...............................2

23.2 Consent of Independent Registered Public Accounting Firm ............................2

31.1 Rule 13a 14/15d 14 (a) Certifications ....................2

32.1 Section 1350 Certifications ..................2

99.1 1997 Compensatory Stock Option Plan, incorporated by reference to Exhibit 10.1 to Form 8-K dated October 2, 1997 ...............1

99.2 1997 Employee Stock Compensation Plan, incorporated by reference to Exhibit 10.2 to Form 8-K dated October 2, 1997 ..................1

99.3 2002 Compensatory Stock Option Plan, incorporated by reference to Exhibit 99.1 to Form 8-K dated May 1, 2002 ..................1

1 - Incorporated by reference to another registration statement, report or document.

2 - Included as part of this Report.

Filed during 2005:

Item 1.01, Entry into a Material Definitive Agreement and Item 9.01 Financial Statements and Exhibits. The exhibit was a Press release of Global Aircraft Solutions, Inc. issued January 20, 2005...1

Item 1.01 and Item 2.03, Entry into a Material Definitive Agreement and Creation of a Direct Financial Obligation of a Registrant, respectively and Item 9.01 Financial Statements and Exhibits. The exhibits were 99.1, Form of Loan Agreement among Global Aircraft Solutions, Inc., Hamilton Aerospace Technolgies, Inc. and World Jet Corporation as borrowers and Bank as lender; 99.2, Form of Promissory Note by Global Aircraft Solutions, Inc., Hamilton Aeropsace Technologies, Inc. and World Jet Corporation in favor of Bank as Lender; 99.3, Form of Acknowledgement of Closing date of Line of Credit, issued July 14, 2005..1.

Item 1.01, Entry into a Material Definitive Agreement and Item 9.01 Financial Statements and Exhibits. The exhibit was Press Release of Global Aircraft Soluions, Inc. issued August 15, 2005..1.

Item 1.01, Entry into a Material DefinitiveAgreement and Item 9.01 Financial Statements and Exhibits. The exhibits were 99.1, Operating Agreement of Jetglobal, LLC and 99.2, Press Release of Global Aircraft Solutions, Inc. issued September 1, 20051.

Item 1.01, Entry into a Material DefinitiveAgreement and Item 9.01 Financial Statements and Exhibits. The exhibits were 99.1, Operating Agreement of Jetglogbal, LLC; 99.2, Press Release of Global Aircraft Solutions, Inc. issued September 1, 2005; 99.3, Aircraft Sale & Purchase Agreement between Jetglobal,LLC and Jetran, LLC, issued September 9, 20051

Item 1.01, Entry into a Material Definitive Agreement and Item 9.01 Financial Statements and Exhibits. The exhibit was 99.1 Aircraft Sale and Purchase Agreement dated November 14, 2005.. .1

Item 1.01, Entry into a Material Definitive Agreement, issued November 16, 2005 .......................1

Item 1.01 and Item 2.03, Entry into a Material Definitive Agreement and Creation of a Direct Financial Obligation of a Registrant, respectively and Item 9.01 Financial Statements and Exhibits. The exhibits were 99.1, Press Release of Global Aircraft Solutions, Inc. dated December 13, 2005 and 99.2, Form of Modification to Loan Agreement among Global Aircraft Solutions, Inc., Hamilton Aerospace Technologies, Inc. and World Jet Corporation as borrowers and Bank as lender issued December 14, 2005...1

Item 2.02, Results of Operations and Financial Condition and Item 9.01 Financial Statements and Exhibits. The exhibit was 99.1, Transcript of November 16, 2005 Conference Call discussing financial performance and results of operations for fiscal quarter ended September 30, 2005, issued December 2, 2005..1

Item 2.03 Creation of a Direct Financial Obligation of a Registrant. And Item 9.01 Financial Statements and Exhibits. The exhibilts were 99.1, form of Loan Agreement between Hamilton Aerospace Technologies, Inc. as Borrower and M&I Bank as Lender; 99.2, form of Promissory Note by Hamilton Aerospace Technologies, Inc. in favor M&I Bank as Lender; 99.3, Form of Security Agreement between Hamilton Aerospace Technologies, Inc., as grantors, in favor of M&I Bank as secured creditors; 99.4, form of Guaranty between Global Aircraft Solutions, Inc. (Registrant) and M&I Bank as Lender, issued February 8, 2005 ...................1





41

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Promissory Note by Hamilton Aerospace Technologies, Inc. in favor M&I Bank as Lender; 99.3, Form of Security Agreement between Hamilton Aerospace Technologies, Inc., as grantors, in favor of M&I Bank as secured creditors; 99.4, form of Guaranty between Global Aircraft Solutions, Inc. (Registrant) and M&I Bank as Lender, issued February 8, 2005 ...................1

Item 3.02, Unregistered Sales of Equity Securities, issued August 2, 2005 .1.

Item 3.02, Unregistered Sales of Equity Securities, issued September 13, 2005 1

Item 7.01. Regulation FD Disclosure Agreement and Item 9.01 Financial Statements and Exhibits. The exhibit was 99.1, Press Release of Global Aircraft Solutions, Inc. issued November 17, 2005 1 Item 7.01, Regulation FD Disclosure and Item 9.01 Financial Statements and Exhibits. The exhibit was 99.1, Global Aircraft Solutions, Inc. December 6, 2005 investor Presentation issued December 7, 2005..1

Filed during 2006:

Item 2.02, Results of Operations and Financial Condition, Item 7.01, Regulation and Disclosure, and Item 9.01 Financial Statements and Exhibits. The exhibit was 99.1, Transcript of Conference Call of August 15, 2006 discussing financial performance and results of operations for fiscal quarter ended June 30, 2006. Issued August 28, 2006..1

Item 2.02, Results of Operations and Financial Condition, Item 7.01, Regulation FD Disclosure, and Item 9.01 Financial Statements and Exhibits. The exhibit was the transcript of the May 18, 2006 Conference Call discussing financial performance for fiscal quarter ended March 31, 2006. Issued May 22, 2006..1

Item 7.01 Regulation FD Disclosure and Item 9.01 Financial Statements and Exhibits. The exhibit was the Investor Presentation on May 18, 2006. Issued May 19, 2006..1

Item 2.02, Results of Operations and Financial Condition and Item 9.01, Financial Statements and Exhibits. The exhibit was a copy of the May 16, 2006 Press Release. Issued May 16, 2006 1

Item 2.02, Results of Operations and Financial Condition, Item 7.01, Regulation FD Disclosure and Item 9.01, Financial Statements and Exhibits. The exhibits were copy of April 25, 2006 Press Release and copy of May 16, 2006 Press Release. Issued May 16, 2006..1

Item 1.01, Entry into a Material Definitive Agreement, Item 5.02 Departure of Directors or Principal Officers; Election of Directors; Appointment of Principal Officers, Item 9.01, Financial statements and Exhibits. The exhibit was a Press Release issued May 3, 2006. Issued May 4, 2006..1

Item 2.02, Results of Operations and Financial Condition, Item 7.01, Regulation FD Disclosure and Item 9.01, Financial Statements and Exhibits. The exhibit was a copy of the April 25, 2006 Press Release. Issued April 25, 2006 ..................1

Item 2.02 Results of Operations and Financial Condition, Item 7.01, Regulation FD Disclosure and Item 9.01 Financial Statements and Exhibits. The exhibit was the transcript of April 10, 2006 Conference Call discussing financial performance and results of operations for fiscal year ended December 31, 2005. Issued April 13, 2006.1

Item 2.02, Results of Operations and Financial Condition, Item 7.01, Regulation FD Disclosure and Item 9.01, Financial Statements and Exhibits. The exhibit was copy of April 10, 2006 Press Release. Issued April 11, 2006.1

Item1.01, Entry into a Material Definitive Agreement, Item 2.03, Creation of a Direct Financial Obligation of a Registrant and Item 9.01, Financial Statements and Exhibits. The Exhibits were Press Release dated December 13, 2005 and a Form of Modification to Loan Agreement with M&I Bank as lender. Issued January 30, 2006 1

Item 1.01, Entry into a Material Definitive Agreement and Item 9.01, Financial Statements andExhibits. The exhibits were Operating Agreement for Jetglobal, LLC, Press Release issued September 1, 2005 and Aircraft Sale & Purchase Agreement between Jetglobal, LLC and Jetran, which is the subject of a request for confidential treatment. Issued January 25, 2006.1

Item 4.01, Changes in Registrants Certifying Accountant, Item, 5.02, Departure of Directors or Principal Officers; Election of Directors; appointment of Principal Officers, Item 9.01, Financial Statements and Exhibits. The exhibits are Letter from Larry ODonnell CPA, PC to the SEC and January 9, 2006 Press Release announcing the Change in Registrants Certifying Accountant and the addition of a member to the Board of Directors. Issued November 15, 2006 ...............1

Item 2.02, Results of Operations and Financial Condition, Item 7.01 Regulation FD Disclosure and Item 9.01, Financial Statements and Exhibits. The exhibit is the transcript of the November 17, 2006 Conference Call discussing financial performance and results of operation for fiscal quarter ended September 30, 2006. Issued November 15, 2006.1

Item 2.02, Results of Operations and Financial Condition, Item 7.01, regulation and Disclosure, and Item 99.1, Financial Statements and Exhibits. The exhibit was 99.1, Copy of November 15, 2006 Press Release. Issued November 15, 2006..1

1 - Incorporated by reference to another registration statement, report or document.

42

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2 - Included as part of this Report.

(b) Reports on Form 8-K.

Filed during 4thquarter of 2007:

Issued November 7, 2007, Item 1.01, Entry into a Material Definitive Agreement, Item 2.03, Creation of a Direct Financial Obligation under an Off-Balance Sheet Arrangement of a Registrant, Item 9.01, Financial Statements and Exhibits. The exhibit was a loan extension agreement with the senior lender of the Company.

Issued December 26, 2007, Item 1.01, Entry into a Material definitive Agreement, Item 2.03, Creation of a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement of a Registrant, Item 3.02, Unregistered Sales of Equity Securities, Item 3.03 Material Modification to Rights of Security Holders and Item 9.01 Financial Statements and Exhibits. The exhibits were: Form of Senior Secured Debentures, Form of Junior Secured Debenture, Secured Purchase Agreement, Warrant, Registration Rights Agreement, Post Closing Agreement, Pledge and Security Agreement, Form of Aircraft Security Agreement used to secure all subject aircraft and Personal Guaranty all dated December 20, 2007.

Filed during 1st, 2ndand 3rdquarters of 2007:

Issued April 18, 2007, Item 2.02 Results of Operations and Financial Condition and Item 7.01, Regulation FD Disclosure.

Issued April 23, 2007, Item 2.02, Result of Operations and Financial Condition, Item 7.01, Regulation FD Disclosure and Item 9.01 Financial Statements and Exhibits. The exhibit was a Press Release of Global Aircraft Solutions, Inc. issued April 23, 2007.

Issued May 1, 2007, Item 2.02 Results of Operations and Financial Condition, Item 7.01 Regulation FD Disclosure, and Item 9.01 Financial Statements and Exhibits. The exhibit was the transcript of a conference call on April 23, 2007.

Issued May 16, 2007, Item 2.02, Results of Operations and Financial Condition, Item 7.01, Regulation FD Disclosure and Item 9.01 Financial Statements and Exhibits. The exhibit was a Press Release of Global Aircraft Solutions, Inc. issued May 16, 2007.

Issued May 17, 2007, Item 5.02, Departure of Directors or Principal Officers; Election of Directors; Appointment of Principal Officers,

Issued June 4, 2007, Item 2.02 Results of Operations and Financial Condition, Item 7.01, Regulation FD Disclosure and Item 9.01 Financial Statements and Exhibits. The exhibit was the transcript of a May 24, 2007 Conference Call.

Issued July 9, 2007, Item 4.01, Changes in Registrants Certifying Accountant and Item 9.01, Financial Statements and Exhibits. The exhibit was a letter from Moss Adams, LLP to the Securities & Exchange Commission.

Issued July 20, 2007, Item 5.02, Departure of Directors or Principal Officers; Election of Directors; Appointment of Principal Officers and Item 9.01, Financial Statements and Exhibits. The exhibits were (1) Letter from Alfredo Mason dated July 16, 2007 to Global Aircraft Solutions, Inc. and (2) Letter from Alfredo Mason dated July 19, 2007 to the Securities and Exchange Commission.

Issued September 5, 2007, Item 1.01, Entry into a Material Definitive Agreement, Item 5.02, Departure of Directors or Principal Officers; Appointment of Principal Officers; Compensatory Arrangements of Certain Officers and Item 9.01 Financial Statements and Exhibits. The exhibit were (1) Copy of Participation Agreement between Global and GALP, (2) Copy of Employment Agreement between Global Aircraft Solutions, Inc. and Mr. Ian Herman, and (3) Press Release of Global Aircraft Solutions, Inc. issued September 4, 2007.

ITEM 14.    PRINCIPAL ACCOUNTANT FEES AND SERVICES.

The following table represent aggregate fees billed to the Company for the years ended December 31, 2007 and 2006 by Moss Adams, L.L.P., the companys former principal accounting firm, and for the year ended December 31, 2007 by, Daszkal Bolton, L.L.P., the Companys current principal accounting firm.

43

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Year Ended December 31,2007
     
     
     2006Audit Fees
     
     $
     189,317
     
     $
     63,020Audit-related Fees (a)
     
     
     100,364
     
     
     25,305Tax Fees (b)
     
     
     55,883
     
     
     7,830All Other Fees (c)
     
     
     3,950
     
     
     685Total Fees (d)
     
     
     349,514
     
     $
     96,840


|(a) | Primarily audit services for acquisitions and review services                                                                               
|--- | --------------------------------------------------------------------------------------------------------------------------------------------
|   
|(b) | Primarily tax returns, advice and planning                                                                                                  
|   
|(c) | Primarily advisory services relating to compliance with reporting requirements                                                              
|   
|(d) | All fees have been approved by the Audit Committee. All work was performed by the principal accounting firms full-time permanent employees.
|   

The Audit Committee has considered whether performance of services other than audit services is compatible with maintaining the independence of Daszkal Bolton, L.L.P.

In 2004, the Audit Committee adopted a formal policy concerning approval of audit and non-audit services to be provided by the independent auditor to the Company. The policy requires that all services Daszkal Bolton L.L.P., the Companys independent registered public accountant, may provide to the Company, including audit services and permitted audit-related and non-audit pre-approved by the Committee.



|SIGNATURES
|----------

Pursuant to the requirements of Section 13 or Section 15 (d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

Date:  April 10, 2008

| |  |                                   |  | 
| |  | --------------------------------- |  | 
| |  |                                  
| |  | GLOBAL AIRCRAFT SOLUTIONS, INC.  
| |  |                                  
| |  | By: /s/ Ian Herman               
| |  | Ian Herman                       
| |  | Chaiman of the Board of Directors
| |  | and Chief Executive Officer      

Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.

44

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|                     |  |                                                                          |  |               
|-------------------- |  | ------------------------------------------------------------------------ |  | --------------
|SIGNATURE            |  | TITLE                                                                    |  | DATE          
|                     |  |                                                                          |  |               
|/s/ Ian Herman       |  | Chairman of the Board of Directors, Chief Executive Officer and Director |  | April 10, 2008
|Ian Herman           |  |                                                                          |  |               
|                    
|/s/ John B. Sawyer   |  | President, Chief Operating Officer and Director                          |  | April 10, 2008
|John B. Sawyer       |  |                                                                          |  |               
|                    
|/s/ Lawrence Mulcahy |  | Director                                                                 |  | April 10, 2008
|Lawrence Mulcahy     |  |                                                                          |  |               
|                     |  |                                                                          |  |               
|/s/ Michael Hannley  |  | Director                                                                 |  | April 10, 2008
|Michael Hannley      |  |                                                                          |  |               
|                     |  |                                                                          |  |               
|/s/ Seymour Siegel   |  | Director                                                                 |  | April 10, 2008
|Seymour Siegel       |  |                                                                          |  |               
|                     |  |                                                                          |  |               
|/s/ Gordon Hamilton  |  | Director                                                                 |  | April 10, 2008
|Gordon Hamilton      |  |                                                                          |  |               
|                    
|/s/ Patricia Graham  |  | Chief Accounting Officer                                                 |  | April 10, 2008
|Patricia Graham      |  |                                                                          |  |               

45

---

Report of Independent Registered Public Accounting Firm



|To the Board of Directors and StockholdersGlobal Aircraft Solutions, Inc.
|-------------------------------------------------------------------------

We have audited the accompanying balance sheets of Global Aircraft Solutions, Inc. as of December 31, 2007, and the related statements of operations, changes in stockholders equity and cash flows for the year then ended. These financial statements are the responsibility of the Companys management. Our responsibility is to express an opinion on these financial statements based on our audit.

We conducted our audit in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. The Company has determined that it is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. Our audit included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Companys internal control over financial reporting. Accordingly, we express no such opinion. An audit also includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles use

d and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion.

In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of Global Aircraft Solutions, Inc., as of December 31, 2007, and the results of its operations and its cash flows for the years then ended, in conformity with accounting principles generally accepted in the United States of America.



|/s/ Daszkal Bolton LLPBoca Raton, FloridaApril 14, 2008
|-------------------------------------------------------

46





---

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM



|To the Board of Directors and Shareholdersof Global Aircraft Solutions, Inc.:
|-----------------------------------------------------------------------------

We have audited the accompanying consolidated balance sheet of Global Aircraft Solutions, Inc. and subsidiaries (the Company) as of December 31, 2006, and the related consolidated statements of operations, stockholders equity, and cash flows for the year then ended. These consolidated financial statements are the responsibility of the Companys management. Our responsibility is to express an opinion on these consolidated financial statements based on our audit.

We conducted our audit in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. Our audit included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Companys internal control over financial reporting. Accordingly, we express no such opinion. An audit also includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting p

rinciples used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion.

In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the consolidated financial position of Global Aircraft Solutions, Inc. and subsidiaries at December 31, 2006, and the results of their operations and their cash flows for the year then ended, in conformity with accounting principles generally accepted in the United States of America.

As described in Note 1 to the consolidated financial statements the Company intends to divest its 30% ownership in Jetglobal, LLC.

As described in Note 2 to the consolidated financial statements, effective January 1, 2006, the Company changed its method of accounting for share-based payments to conform to Statement of Financial Accounting Standards No. 123R,Share-Based Payment.



|/s/ Moss Adams LLPScottsdale, ArizonaApril 16, 2007
|---------------------------------------------------

47

---



|Report of Independent Registered Public Accounting Firm
|-------------------------------------------------------



|To the Board of Directors and Shareholdersof Global Aircraft Solutions, Inc.:
|-----------------------------------------------------------------------------

We have audited the accompanying consolidated statements of operations, shareholders equity and cash flows of Global Aircraft Solutions, Inc. and subsidiaries for the year ended December 31, 2005. These financial statements are the responsibility of the Companys management. Our responsibility is to express an opinion of these financial statements based on our audit.

We conducted our audit in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion.

In our opinion, the financial statements referred to above present fairly, in all material respects, results of operations and cash flows of Global Aircraft Solutions, Inc. and subsidiaries for the year ended December 31, 2005, in conformity with accounting principles generally accepted in the United States of America.



|/s/  EPSTEIN, WEBER & CONOVER, PLCScottsdale, ArizonaApril 3, 2006
|------------------------------------------------------------------

48

---



|GLOBAL AIRCRAFT SOLUTIONS
Consolidated Balance SheetsDecember 31, 2007and 2006
|------------------------------------------------------------------------------

|                                                                                        |  |  |   |            |  |  |  |  |   |           
|--------------------------------------------------------------------------------------- |  |  | - | ---------- |  |  |  |  | - | ----------
|ASSETS                                                                                 
|                                                                                       
|                                                                                        |  |  |   | 2007       |  |  |  |  |   | 2006      
|                                                                                        |  |  |   |            |  |  |  |  |   |           
|CURRENT ASSETS                                                                          |  |  |   |            |  |  |  |  |   |           
|Cash and cash equivalents                                                               |  |  | $ | 1,221,598  |  |  |  |  | $ | 104,440   
|Accounts receivable                                                                     |  |  |   | 7,412,120  |  |  |  |  |   | 7,870,799 
|Note receivable                                                                         |  |  |   | -          |  |  |  |  |   | 455,859   
|Due from equity investee partner                                                        |  |  |   | 472,000    |  |  |  |  |   | 3,946,414 
|Inventory                                                                               |  |  |   | 16,429,501 |  |  |  |  |   | 7,852,691 
|Restricted funds                                                                        |  |  |   | 196,181    |  |  |  |  |   | 65,500    
|Deferred income taxes                                                                   |  |  |   | 1,682,948  |  |  |  |  |   | 299,508   
|Other current assets                                                                    |  |  |   | 752,784    |  |  |  |  |   | 191,114   
|                                                                                       
|TOTAL CURRENT ASSETS                                                                    |  |  |   | 28,167,132 |  |  |  |  |   | 20,786,325
|                                                                                       
|Property, plant and equipment                                                           |  |  |   | 1,024,837  |  |  |  |  |   | 1,521,037 
|Investments in and advances to affiliates                                               |  |  |   | 20,000     |  |  |  |  |   | 6,063,067 
|Goodwill                                                                                |  |  |   | 38,992     |  |  |  |  |   | 38,992    
|Deferred income taxes                                                                   |  |  |   | 76,718     |  |  |  |  |   | -         
|Other assets                                                                            |  |  |   | 366,469    |  |  |  |  |   | 64,855    
|                                                                                       
|TOTAL ASSETS                                                                            |  |  | $ | 29,694,148 |  |  |  |  | $ | 28,474,276
|                                                                                       
|                                                                                       
|The accompanying notes are an integral part of these consolidated financial statements. |  |  |   |            |  | 

49

---

|                                                                                        |  |   |            |   |  |   |           
|--------------------------------------------------------------------------------------- |  | - | ---------- | - |  | - | ----------
|GLOBAL AIRCRAFT SOLUTIONS, INC.                                                        
|                                                                                       
|Consolidated Balances Sheet                                                            
|December 31, 2007and 2006                                                              
|                                                                                       
|LIABILITIES AND STOCKHOLDERS' EQUITY                                                   
|                                                                                       
|                                                                                        |  |   | 2007       |   |  |   | 2006      
|CURRENT LIABILITIES                                                                     |  |   |            |   |  |   |           
|Notes payable                                                                           |  | $ | 10,268,091 |   |  | $ | 5,101,568 
|Accounts payable  trade                                                                |  |   | 3,051,776  |   |  |   | 5,001,567 
|Customer deposits                                                                       |  |   | 419,076    |   |  |   | 541,878   
|Billings in excess of costs and estimated                                               |  |   |            |   |  |   |           
|earnings on contracts in progress                                                       |  |   | 822,782    |   |  |   | 224,046   
|Accrued liabilities                                                                     |  |   | 484,109    |   |  |   | 493,404   
|Income taxes payable                                                                    |  |   | 673,453    |   |  |   | 735,466   
|Capital lease obligations, current portion                                              |  |   | 62,038     |   |  |   | 53,247    
|                                                                                       
|TOTAL CURRENT LIABILITIES                                                               |  |   | 15,781,325 |   |  |   | 12,151,176
|                                                                                       
|LONG-TERM LIABILITIES                                                                   |  |   |            |   |  |   |           
|Capitalized lease obligations, net of current portion                                   |  |   | 170,990    |   |  |   | 224,867   
|Deferred Tax Liability                                                                  |  |   | -          |   |  |   | 344,027   
|                                                                                       
|TOTAL LONG-TERM LIABILITIES                                                             |  |   | 170,990    |   |  |   | 568,894   
|                                                                                       
|TOTAL LIABILITIES                                                                       |  |   | 15,952,315 |   |  |   | 12,720,070
|                                                                                        |  |   |            |   |  |   |           
|Commitments and contingencies                                                           |  |   |            |   |  |   |           
|                                                                                       
|STOCKHOLDERS' EQUITY                                                                    |  |   |            |   |  |   |           
|Preferred stock, $0.001 par value, 5,000,000 shares                                     |  |   |            |   |  |   |           
|authorized, no shares issued or outstanding                                             |  |   | -          |   |  |   | -         
|Common stock, $0.001 par value, 100,000,000                                             |  |   |            |   |  |   |           
|shares authorized in 2007 and 2006; 40,181,601 and                                      |  |   |            |   |  |   |           
|39,587,807 shares issued and outstanding in                                             |  |   |            |   |  |   |           
|2007 and 2006                                                                           |  |   | 40,181     |   |  |   | 39,589    
|Additional paid-in capital                                                              |  |   | 13,755,973 |   |  |   | 12,723,591
|Contributed capital                                                                     |  |   | 620,289    |   |  |   | 620,289   
|Retained earnings                                                                       |  |   | (674,610   | ) |  |   | 2,370,737 
|                                                                                       
|TOTAL STOCKHOLDERS' EQUITY                                                              |  |   | 13,741,833 |   |  |   | 15,754,206
|                                                                                       
|                                                                                       
|TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY                                              |  | $ | 29,694,148 |   |  | $ | 28,474,276
|                                                                                       
|                                                                                       
|The accompanying notes are an integral part of these consolidated financial statements. |  |   |            |   | 

50

---



|GLOBAL AIRCRAFT SOLUTIONS, INC.
|-------------------------------



|Consolidated Statements of OperationsYears ended December 31, 2007, 2006 and 2005
|---------------------------------------------------------------------------------

|                                                                                                            |   |       |             |   |      |             |   |      |             |  
|----------------------------------------------------------------------------------------------------------- | - | ----- | ----------- | - | ---- | ----------- | - | ---- | ----------- | -
|                                                                                                            |   |       | 2007        |   |      | 2006        |   |      | 2005        |  
|Sales                                                                                                       |   |       |             |   |      |             |   |      |             |  
|Sales, maintenance, repair and overhaul                                                                     |   | $     | 14,364,784  |   | $    | 24,331,466  |   | $    | 19,134,757  |  
|Sales, aircraft trading                                                                                     |   |       | 7,900,000   |   |      | 3,223,000   |   |      | 13,550,500  |  
|Sales, parts                                                                                                |   |       | 2,239,641   |   |      | 4,634,155   |   |      | 6,388,380   |  
|Sales, other                                                                                                |   |       | 239,076     |   |      | 2,353,574   |   |      | 2,155,011   |  
|Total sales                                                                                                 |   | $     | 24,743,501  |   | $    | 34,542,195  |   | $    | 41,228,648  |  
|Cost of sales                                                                                               |   |       |             |   |      |             |   |      |             |  
|Cost of sales, maintenance, repair and overhaul                                                             |   | $     | (10,758,759 |   | $    | (19,776,552 |   | $    | (16,903,015 |  
|Cost of sales, aircraft trading                                                                             |   |       | (6,848,254  | ) |      | (3,190,369  | ) |      | (10,019,728 | )
|Cost of sales, parts                                                                                        |   |       | (693,607    | ) |      | (2,012,101  | ) |      | (3,389,964  | )
|Cost of sales, other                                                                                        |   |       | (7,353      | ) |      | (769,027    | ) |      | (529,754    | )
|Inventory write down                                                                                        |   |       | ( 393,752   | ) |      | (192,775    | ) |      | (215,500    | )
|Total cost of sales                                                                                         |   | $     | (18,701,725 | ) | $    | (25,940,824 | ) | $    | (31,057,961 | )
|                                                                                                           
|Gross profit                                                                                                |   | $     | 6,041,776   |   | $    | 8,601,371   |   | $    | 10,170,687  |  
|                                                                                                           
|Selling, general and administrative expenses                                                                |   |       | (10,908,740 | ) |      | (8,591,738  | ) |      | (7,780,332  | )
|Penalties                                                                                                   |   |       | -           |   |      | (11,742     | ) |      | (1,061      | )
|                                                                                                           
|(Loss) income from operations                                                                               |   | $     | (4,866,964  | ) | $    | (2,109      | ) | $    | 2,389,294   |  
|                                                                                                           
|Other income (expense):                                                                                     |   |       |             |   |      |             |   |      |             |  
|Interest income                                                                                             |   | $     | 386,736     |   | $    | 76,414      |   | $    | 245,610     |  
|Interest expense                                                                                            |   |       | (1,261,813  | ) |      | (587,183    | ) |      | (386,927    | )
|Loss on asset disposals                                                                                     |   |       | (17,431     | ) |      |             |   |      |             |  
|Miscellaneous expense                                                                                       |   |       | (111,094    | ) |      | (197,932    | ) |      | (110        | )
|Miscellaneous income                                                                                        |   |       | 107,712     |   |      | 114,874     |   |      | 130,571     |  
|Gain on settlement with equity investee partner                                                             |   |       | 488,441     |   |      |             |   |      | 1,268,970   |  
|Equity in earnings of unconsolidated affiliate                                                              |   |       | 214,800     |   |      | 1,808,744   |   |      | (157,874    | )
|                                                                                                           
|Net (loss) income, before income taxes                                                                      |   | $     | (5,059,613  | ) | $    | 1,212,808   |   | $    | 3,489,534   |  
|Income tax benefit (expense)                                                                                |   |       | 2,014,266   |   |      | (386,500    | ) |      | (366,178    | )
|Net (loss) income                                                                                           |   | $     | (3,045,347  | ) | $    | 826,308     |   | $    | 3,123,356   |  
|                                                                                                           
|Net (loss) income per share, Basic (2007 39,927,725 shares; 200639,118,400 shares; 2005 33,848,722 shares). |   |       |             |   |      |             |   |      |             |  
|                                                                                                            | $ | (0.08 | )           | $ | 0.02 |             | $ | 0.09 |            
|Net (loss) income per share, Diluted (2007 39,927,725; 2006                                                 |   |       |             |   |      |             |   |      |             |  
|40,375,173 shares; 2005 35,260,671 shares).                                                                 |   | $     | (0.08       | ) | $    | 0.02        |   | $    | 0.09        |  
|                                                                                                           
|                                                                                                           
|The accompanying notes are an integral part of these consolidated financial statements.                     |   |       |             |  

51

---

|                                                           |  |            |  |        |   |  |                    |   |  |             |  |             |   |  |            |  
|---------------------------------------------------------- |  | ---------- |  | ------ | - |  | ------------------ | - |  | ----------- |  | ----------- | - |  | ---------- | -
|GLOBAL AIRCRAFT SOLUTIONS, INC.                           
|                                                          
|Consolidated Statements of Changes in Stockholders Equity
|Years Ended December 31, 2007, 2006 and 2005              
|                                                          
|                                                           |  | Shares     |  | Common |   |  | Additional Paid in |   |  | Contributed |  | Accumulated |   |  |            |  
|                                                           |  |            |  | Stock  |   |  | capital            |   |  | capital     |  | earnings    |   |  | Total      |  
|                                                           |  |            |  | $      |   |  | $                  |   |  | $           |  | $           |   |  | $          |  
|                                                           |  |            |  |        |   |  |                    |   |  |             |  |             |   |  |            |  
|Balance December 31, 2004                                  |  | 30,650,386 |  | 31,030 |   |  | 7,033,950          |   |  | 620,289     |  | (1,578,927  | ) |  | 6,106,342  |  
|Shares sold                                                |  | 7,200,000  |  | 7,200  |   |  | 4,644,000          |   |  |             |  |             |   |  | 4,651,200  |  
|Shares issued under non-cash                               |  |            |  |        |   |  |                    |   |  |             |  |             |   |  |            |  
|warrant provisions                                         |  | 442,829    |  | 443    |   |  | (443               | ) |  |             |  |             |   |  | 0          |  
|Options exercised                                          |  | 50,000     |  | 50     |   |  | 14,950             |   |  |             |  |             |   |  | 15,000     |  
|Shares issued, directors                                   |  | 200,000    |  | 200    |   |  | 76,800             |   |  |             |  |             |   |  | 77,000     |  
|Shares vested on employment                                |  |            |  |        |   |  |                    |   |  |             |  |             |   |  |            |  
|agreements                                                 |  | 75,000     |  | 75     |   |  | 55,425             |   |  |             |  |             |   |  | 55,500     |  
|Net income                                                 |  |            |  |        |   |  |                    |   |  |             |  | 3,123,356   |   |  | 3,123,356  |  
|Balance December 31,2005                                   |  | 38,618,215 |  | 38,998 |   |  | 11,824,683         |   |  | 620,289     |  | 1,544,429   |   |  | 14,028,399 |  
|Exercise of warrants                                       |  | 387,092    |  | 387    |   |  | 95,767             |   |  |             |  |             |   |  | 96,154     |  
|Share-based payments to                                    |  |            |  |        |   |  |                    |   |  |             |  |             |   |  |            |  
|directors                                                  |  | 30,000     |  | 30     |   |  | 73,470             |   |  |             |  |             |   |  | 73,500     |  
|Stock issued to employees for                              |  |            |  |        |   |  |                    |   |  |             |  |             |   |  |            |  
|compensation                                               |  | 552,500    |  | 552    |   |  | 581,214            |   |  |             |  |             |   |  | 581,766    |  
|Tax effects of share-based                                 |  |            |  |        |   |  |                    |   |  |             |  |             |   |  |            |  
|payments                                                   |  |            |  |        |   |  | 148,079            |   |  |             |  |             |   |  | 148,079    |  
|Net income                                                 |  |            |  |        |   |  |                    |   |  |             |  | 826,308     |   |  | 826,308    |  
|Balance December 31, 2006                                  |  | 39,587,807 |  | 39,967 |   |  | 12,723,213         |   |  | 620,289     |  | 2,370,737   |   |  | 15,754,206 |  
|Exercise of warrants (non-cash)                            |  | 48,494     |  | 48     |   |  | (48                | ) |  |             |  |             |   |  | 0          |  
|Share-based payments to                                    |  |            |  |        |   |  |                    |   |  |             |  |             |   |  |            |  
|directors                                                  |  | 10,000     |  | 10     |   |  | 13,890             |   |  |             |  |             |   |  | 13,900     |  
|Stock issued to employees for                              |  |            |  |        |   |  |                    |   |  |             |  |             |   |  |            |  
|compensation                                               |  | 340,000    |  | 340    |   |  | 204,670            |   |  |             |  |             |   |  | 205,010    |  
|Stock issued to third parties                              |  | 120,000    |  | 120    |   |  | 94,680             |   |  |             |  |             |   |  | 94,800     |  
|Stock issued to third parties                              |  |            |  |        |   |  |                    |   |  |             |  |             |   |  |            |  
|(restricted)                                               |  | 75,000     |  | 75     |   |  | 29,465             |   |  |             |  |             |   |  | 29,540     |  
|Shares vested on employment                                |  |            |  |        |   |  |                    |   |  |             |  |             |   |  |            |  
|agreements                                                 |  |            |  |        |   |  | 176,843            |   |  |             |  |             |   |  | 176,843    |  
|Options issued to a Director                               |  |            |  |        |   |  | 10,546             |   |  |             |  |             |   |  | 10,546     |  
|Warrants issued with                                       |  |            |  |        |   |  |                    |   |  |             |  |             |   |  |            |  
|debentures                                                 |  |            |  |        |   |  | 581,282            |   |  |             |  |             |   |  | 581,282    |  
|Repricing of exiting warrants                              |  |            |  |        |   |  | 69,241             |   |  |             |  |             |   |  | 69,241     |  
|Tax effects of share-based                                 |  |            |  |        |   |  |                    |   |  |             |  |             |   |  |            |  
|payments                                                   |  |            |  |        |   |  | (148,188           | ) |  |             |  |             |   |  | (148,188   | )
|Reclasification from common                                |  |            |  |        |   |  |                    |   |  |             |  |             |   |  |            |  
|stock to APIC                                              |  |            |  | (379   | ) |  | 379                |   |  |             |  |             |   |  | 0          |  
|Net loss                                                   |  |            |  |        |   |  |                    |   |  |             |  | (3,045,347  | ) |  | (3,045,347 | )
|Balance December 31, 2007                                  |  | 40,181,301 |  | 40,181 |   |  | 13,755,973         |   |  | 620,289     |  | (674,610    | ) |  | 13,741,833 |  

An additional 1,319,918 shares will be issued on the vesting dates of employment agreements now in force (SeeEarnings per Share).

The accompanying notes are an integral part of these consolidated financial statements.

52

---

|                                                    |  |           |   |             |         |   |            |            |   |            |  
|--------------------------------------------------- |  | --------- | - | ----------- | ------- | - | ---------- | ---------- | - | ---------- | -
|GLOBAL AIRCRAFT SOLUTIONS, INC.                    
|                                                   
|Consolidated Statements of Cash Flows              
|Years ended December 31, 2007, 2006 and 2005       
|                                                   
|                                                   
|                                                    |  |           |   | 2007        |         |   | 2006       |            |   | 2005       |  
|                                                    |  |           |   |             |         |   |            |            |  
|Increase (Decrease) in Cash and Cash Equivalents:   |  |           |   |             |         |   |            |            |  
|                                                   
|Cash flows from operating activities:               |  |           |   |             |         |   |            |            |   |            |  
|Net (loss) income                                   |  |           | $ | (3,804,875  | )       | $ | 826,308    |            | $ | 3,123,356  |  
|                                                   
|Adjustments to reconcile net income to net cash     |  |           |   |             |         |   |            |            |   |            |  
|provided by operating activities:                   |  |           |   |             |         |   |            |            |   |            |  
|Equity in income of unconsolidated affiliate        |  |           |   | (214,800    | )       |   | (1,808,745 | )          |   | 157,874    |  
|Gain on settlement with equity investee partner     |  | (488,441  | ) |             | --      |   |            | (1,268,970 | )
|Depreciation                                        |  |           |   | 564,071     |         |   | 582,710    |            |   | 489,818    |  
|Amortization                                        |  |           |   | --          |         |   | 162,377    |            |   | 162,376    |  
|Write down of inventory                             |  |           |   | 393,753     |         |   | 192,775    |            |   | 212,500    |  
|Customer deposits forfeited                         |  |           |   | (50,000     | )       |   | --         |            |   | --         |  
|Deferred income taxes                               |  |           |   | --          |         |   | 175,118    |            |   | 6,400      |  
|Federal income tax adjustment                       |  |           |   | (2,014,266  | )       |   | --         |            |   | --         |  
|Provision for bad debts                             |  |           |   | 3,610,776   |         |   | 337,508    |            |   | 473,208    |  
|Loss on disposal of fixed assets/investments        |  |           |   | 17,431      |         |   | 50,874     |            |   | --         |  
|Intercompany non-cash transactions                  |  |           |   | 9, 205      |         |   | --         |            |   | --         |  
|Expenses paid with stock                            |  |           |   | 1,086,360   |         |   | 617,459    |            |   | 326,594    |  
|Net adjustments to reconcile Net Income to net cash |  | 3,062,277 |   |             | 310,076 |   |            | 559,800    |  
|                                                   
|Changes in Assets and Liabilities:                  |  |           |   |             |         |   |            |            |   |            |  
|Accounts receivable                                 |  |           |   | (1,568,540  | )       |   | (4,003,930 | )          |   | (2,775,131 | )
|Prepaid expenses                                    |  |           |   | (82,147     | )       |   | 190,625    |            |   | (115,149   | )
|Inventory                                           |  |           |   | (320,563    | )       |   | 721,969    |            |   | (5,260,186 | )
|Restricted funds                                    |  |           |   | (130,681    | )       |   | 33,000     |            |   | (98,500    | )
|Other current assets                                |  |           |   | (110,510    | )       |   | --         |            |   | 56,384     |  
|Other non-current assets                            |  |           |   |             |         |   | 127,027    |            |   | (177,788   | )
|Accounts payable  trade                            |  |           |   | ( 2,368,573 | )       |   | (2,235,466 | )          |   | 4,535,546  |  
|Accounts payable  related parties                  |  |           |   | --          |         |   | --         |            |   | (6,219     | )
|Customer deposits                                   |  |           |   | 197,462     |         |   | 541,878    |            |   | (280,537   | )
|Billings in excess of cost and estimated            |  |           |   |             |         |   |            |            |   |            |  
|earnings on contracts in progress                   |  |           |   | 598,736     |         |   | 200,588    |            |   | (942,780   | )
|Income Taxes Payable                                |  |           |   | 48,635      |         |   | 49,563     |            |   | 374,722    |  
|Accrued liabilities                                 |  |           |   | ( 9,294     | )       |   | (77,320    | )          |   | (272,908   | )
|Net cash used by operating activities               |  |           |   | ( 3,777,180 | )       |   | (3,315,682 | )          |   | (1,279,390 | )
|                                                   
|Cash flows from investing activities:               |  |           |   |             |         |   |            |            |   |            |  
|Purchase of property, plant and equipment           |  |           |   | ( 73,947    | )       |   | (187,261   | )          |   | (499,827   | )
|Payments received on notes receivable               |  |           |   | 473,098     |         |   | 1,547,010  |            |   | 196,390    |  
|Distributions from Jetglobal, LLC                   |  |           |   | --          |         |   | 300,000    |            |   | --         |  

53

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|                                                     |  |           |   |            |          |   |            |          |   |            |  
|---------------------------------------------------- |  | --------- | - | ---------- | -------- | - | ---------- | -------- | - | ---------- | -
|Investment in GALP                                   |  |           |   | (20,000    | )        |   | --         |          |   | --         |  
|Investment in Jetglobal, LLC                         |  |           |   | 48,973     |          |   | (867,046   | )        |   | (5,222,594 | )
|Net cash provided/(used) by investing activities     |  |           |   | 428,124    |          |   | 792,703    |          |   | (5,526,031 | )
|                                                    
|Cash flows from financing activities:                |  |           |   |            |          |   |            |          |   |            |  
|Proceeds from issuance of common stock               |  |           |   | --         |          |   | 96,154     |          |   | 4,911,000  |  
|Payments related to common stock issued              |  |           |   | --         |          |   | --         |          |   | (244,800   | )
|Proceeds from bank loans                             |  |           |   | 141,994    |          |   | 5,746,247  |          |   | 7,511,373  |  
|Repayments of bank loans                             |  |           |   | (4,956,391 | )        |   | (3,419,839 | )        |   | (4,949,634 | )
|Proceeds from Notes Payable                          |  |           |   | 12,535,000 |          |   | --         |          |   | --         |  
|Proceeds from Note Payable  related party           |  |           |   | 1,250,000  |          |   | --         |          |   | --         |  
|Due to factor                                        |  |           |   | --         |          |   | --         |          |   | (604,409   | )
|Payments on notes payable                            |  |           |   | (3,022,520 | )        |   | (280,496   | )        |   | --         |  
|Pyaments on notes payable  related party            |  |           |   | (1,260,000 | )        |   | --         |          |   | --         |  
|Payments on capital lease obligations                |  |           |   | (56,442    | )        |   | (25,846    | )        |   | --         |  
|Excess tax benefits from stock options exercised     |  | (148,188  | ) |            | 148,188  |   |            | --       |  
|Other financing activities, net                      |  |           |   | (17,239    | )        |   | (5,002     | )        |   |            |  
|Net cash provided by financing activities            |  |           |   | 4,466,214  |          |   | 2,259,406  |          |   | 6,623,530  |  
|                                                    
|Net increase (decrease) in cash and cash equivalents |  | 1,117,158 |   |            | (263,573 | ) |            | (181,891 | )
|Cash and cash equivalents at beginning of period     |  | 104,440   |   |            | 368,013  |   |            | 549,904  |  
|                                                    
|Cash and cash equivalents at end of period           |  |           | $ | 1,221,598  |          | $ | 104,440    |          | $ | 368,013    |  

|1. | Interest paid in 2007 was $1,227,001, in 2006 was $558,644 and in 2005 was $375,745.
|-- | ------------------------------------------------------------------------------------
|  
|2. | No taxes were paid in 2007, $14,351 was paid in 2006 and $121,473 was paid in 2005. 
|  



| | Schedule of non-cash investing and financing activities:
| | --------------------------------------------------------

- During the 4thquarter of 2005 $1,475,000 in accounts receivable was transferred to a Note receivable. The Note stipulated weekly payments of $52,993.76, had an interest rate of 8 % per annum, and was all due and payable on or before June 9, 2006. The Note was paid.
- During the 4thquarter of 2005, a note receivable in the amount of $600,000 was issued to Avolar Aero Lineas SA de CV. The principal balance at December 31, 2007 was $0.
- During 2007, $8,650,000 of aircraft inventory was received as part of a Settlement Agreement wherein BCI, Globals partner in Jetglobal, transferred assets to Global in return for Globals interest in Jetglobal.

Property, plant and equipment increased $11,355 during 2007 as a result of capital lease agreements. Net asset value of machinery and equipment acquired under capital leases totaled $235,670 and net asset value of office equipment acquired under capital leases totaled $77,604 at December 31, 2007. Amortization of assets under capital leases is included in depreciation expense. The actual cash payouts for capital lease obligations are reflected in cash flow statement.

The accompanying notes are an integral part of these consolidated financial statements.

54

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|GLOBAL AIRCRAFT SOLUTIONS, INC.Notes to Financial Statements
|------------------------------------------------------------

December 31, 2007, December 31, 2006 and December 31, 2005

1.    BASIS OF PRESENTATION AND PRINCIPLES OF CONSOLIDATION

These consolidated financial statements include the accounts of Global Aircraft Solutions, Inc., and its wholly owned subsidiaries, Hamilton Aerospace Technologies, Inc. (HAT) and Johnstone Softmachine Corporation (Johnstone), and World Jet Corporation (World Jet), collectively, the Company. HAT and Johnstone were acquired by Global on May 2, 2002. Johnstone is currently inactive.

All material transactions and accounts with the subsidiaries have been eliminated from the consolidated financial statements.

2.    ORGANIZATIONS AND NATURE OF OPERATIONS

Global Aircraft Solutions, Inc., formerly Renegade Venture (Nev.) Corporation, formerly Renegade Venture Corporation, was incorporated on February 13, 1989, as a Delaware corporation. In 1997, the Company was re-domiciled as a Nevada Corporation through a merger with a newly formed Nevada Corporation, Renegade Venture (NEV.) Corporation, a wholly owned subsidiary of Renegade Venture Corporation.

On May 2, 2002, the Company acquired 100% of the common stock of Hamilton Aerospace Technologies Inc. ("HAT") pursuant to a Stock Exchange Agreement whereby the former shareholders of HAT received 12,500,000 common shares of Renegade Venture (NEV.) Corporation, now Global Aircraft Solutions, Inc. Subsequent to this reverse merger there were 16,200,000 total common shares outstanding. HAT was formed on April 5, 2002 and commenced operations on April 15, 2002. HAT provides large aircraft maintenance, repair and modification services to owners and operators of large transport-category commercial jet aircraft. Services of this nature are required and needed by passenger and cargo air carriers, aircraft lessors, and governmental entities. HAT provides services to both domestic and foreign customers.

On April 12, 2002, Renegade Venture (NEV.) Corporation, now Global Aircraft Solutions, Inc., acquired 100% of the common stock of Johnstone Softmachine Corporation (Johnstone) pursuant to the Stock Purchase Agreement and Plan of Reorganization by and between LogiCapital Corporation (the principal shareholder of Johnstone), an entity controlled by John Brasher, who, at that time, was a director of Renegade Venture (NEV.) Corporation (he has since resigned) and Renegade Venture (NEV.) Corporation. Mr. Brasher was also a principal stockholder of Renegade Venture (NEV.) Corporation prior to the merger. As such, this transaction represented a transfer between control groups and is reported on a historical cost basis. Johnstone was formed on May 8, 1996 has had no substantial operations, and is in the development stage. Johnstone currently lacks the funding necessary to commence operations.

On July 15, 2004, the Company finalized an agreement to buy 100% of the common stock of World Jet Corporation, a privately held aircraft parts and brokerage company for $2.05 million payable as follows: $1,250,000 in cash at closing, $300,000 in the form of a note maturing January 27, 2005, and 1,000,000 shares of restricted common stock valued at $0.50 per share for the purposes of this transaction ($500,000). The effective date of this agreement is January 1, 2004. The shares were issued in July 2004. As a result of the acquisition, the Company expected to increase its sales to existing customers as well as those serviced by World Jet by combining the products and services of the two companies. It also expected to lower its parts costs through World Jets purchasing abilities.

During 2006, the Company formed Mexican corporation, Hamilton Aerospace Mexico, S.A. de C.V. The purpose of the new corporation was to satisfy Mexican governmental requirements related to the flight line servicing of Mexican airline, Avolar Aerolineas, S.A. de C.V.

During 2007, Global transferred its ownership interest in Jetglobal, LLC, an entity in which the Company had a 30% ownership interest, to BCI Aircraft Leasing, ("BCI") the other partner in Jetglobal, LLC in consideration for aircraft inventory and trailing interest in certain claims of Jetglobal against third parties. The Company and BCI executed a final agreement and settlement on April 20, 2007, and revised on June 29, 2007. The terms of the final agreement with BCI did not result in any impairment to the Company.

On September 4, 2007, the Company and Global Aircraft Leasing Partners, LLC, a Delaware limited liability company, (GALP) reached a tentative agreement that Global would assume a 40% equity interest in GALP. GALP is a start-up aircraft-leasing venture formed to acquire aircraft, through a combination of debt and equity financing, and lease these commercial jet aircraft to operators throughout the world. It has been mutually agreed by the parties that in consideration for a 40% equity participation in GALP, the company will make a one time capital contribution of $40,000. As further consideration the Company will provide to GALP ongoing technical support to facilitate GALPs commercial aircraft purchasing, leasing and sales activities. All technical services provided to GALP by HAT and World Jet will be billed at Company-standard rates. The Company had made $20,000 in capital contribution as of December 31, 2007.

A final operating agreement has not yet been finalized and Global had no equity participation in GALP for the year ended December 31, 2007. Global will make an additional capital contribution or $20,000 upon the parties reaching a final operating agreement. Global will not be required to invest capital in aircraft acquired by GALP, and all debt assumed by GALP as a result of aircraft acquisitions will be non-recourse with respect to the Company. Other members of GALP will include equity funding specialists and aircraft leasing professionals. Global and GALP have also agreed that Global will have first right of refusal for all aircraft maintenance, aircraft parts and technical consulting requirements that GALP may have as a result of its aircraft acquisition and leasing activities.

55



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3.   SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Cash and Cash Equivalents

We consider cash and investments in securities with maturities at the date of purchase of three months or less to be cash and cash equivalents.

Use of Estimates

The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.

Reclassifications

Certain amounts in the accompanying financial statements as of December 31, 2006 have been reclassified to conform to the current year presentation, with no effect on reported net income.

Inventory

Inventories are stated at the lower of cost (first-in, first-out) or market. Inventories include new, used parts and parts stripped from aircraft. These stripped parts inventory items are initially carried at original cost basis determined on the pro-rata fair value of the individual parts based on market or catalog pricing. All aircraft parts inventory are grouped as "Inventory" and accounted under 'Current Asssts'. This is based on standard aviation industry practice of showing all aircraft parts under a single line item of inventory. Aircraft parts typically have more than one year of life. Rotable parts have the same life as the aircraft. Repairable parts can be repaired several times over the life of the aircraft and installed on the aircraft. It has been and remains our policy to expense any items that we determine to be obsolete, or unlikeable to sell. The Company has an allowance for slow moving and obsolete parts invento

ry in the amount of $125,980. This allowance was expense during 2007.

The Company reviews the market value of inventories whenever events and circumstances indicate that the carrying value of inventories may not be recoverable from the estimated future sales price less cost of disposal and normal gross profit. In cases where the market values are less than the carrying value, a write down is recognized equal to an amount by which the carrying value exceeds the market value of inventories.

Property and Equipment

Property and equipment are recorded at cost. Depreciation is provided for on the straight-line on the straight-line method over the estimated useful lives of the assets. The estimated useful life of computer equipment and software is three years at both our HAT and World Jet subsidiaries; the estimated useful life of all other categories of assets at our HAT subsidiary is five years. World Jet uses estimated useful lives of 3, 5, and 7 years for its other assets. Amortization of leasehold improvements is computed using the shorter of the lease term or the expected useful life of the assets. Maintenance and repairs that neither materially add to the value of the property nor appreciably prolong its life are charged to expense as incurred. Betterments or renewals are capitalized when incurred.

The Company reviews the carrying value of property, plant and equipment for impairment whenever events and circumstances indicate that the carrying value of an asset may not be recoverable from the estimated future cash flows expected to result from its use and eventual disposition. In cases where undiscounted expected future cash flows are less than the carrying value, an impairment loss is recognized equal to an amount by which the carrying value exceeds the fair value of assets. The factors considered by management in performing this assessment include current operating results, trends, and prospects, as well as the effects of obsolescence, demand, competition, and other economic factors.

Revenue and Cost Recognition

Revenues from fixed-fee contracts or portions of contracts for MRO sales are recognized by employing the percentage-of-completion method, measured by the cost-to-cost method, commencing when progress reaches a point where experience is sufficient to estimate final results with reasonable accuracy. The cumulative catch-up method is used to account for changes in estimates of total revenues, total costs or extent of progress. Each project is considered complete when the subject aircraft departs, or is cleared to depart, our facility. Revision in cost and labor hour estimates and recognition of losses, if any, on these contracts are reflected in the accounting period in which the facts become known. During the periods covered by these financial statements, no material prior period revisions were necessary. As of December 31, 2007 there are no material amounts in excess of the agreed contract price that the Company seeks to collect f

rom customers or others for customer-caused delays, errors in specifications or designs, contract termination, change orders in dispute or unapproved as to both scope and price, or other causes of unanticipated additional costs.

Revenue from part sales is recognized when parts are shipped. All parts are shipped FOB shipping point; title passes at time of shipping and the Company has no further contractual or legal obligation to the customer upon shipping. Revenues from time and material contracts and all other ancillary services are recognized as the services are performed. Revenue from aircraft sales is recognized when the customer accepts delivery of the aircraft and/or when title is transferred.

Earnings per share

Basic earnings per share includes no dilution and is computed by dividing net earnings available to common stockholders by the weighted number of common shares outstanding for the period. Diluted earnings per share reflect the potential dilution of securities that could share in the Companys earnings. Reconciliation of EPS for 2007, 2006 and 2005 are as follows:

|                                        |  |             |   |  |                         |  |   |           |  
|--------------------------------------- |  | ----------- | - |  | ----------------------- |  | - | --------- | -
|                                        |  |             |   |  | For the Year Ended 2007 |  |   |           |  
|                                        |  | Income      |   |  | Shares                  |  |   | Per-Share |  
|                                        |  | (Numerator) |   |  | (Denominator)           |  |   | Amount    |  
|Net loss                                |  | (3,045,347  | ) |  |                         |  |   |           |  
|Basic and diluted EPS                   |  |             |   |  |                         |  |   |           |  
|Income available to common stockholders |  | (3,045,347  | ) |  | 39,927,725              |  | $ | (0.08     | )

56

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|                                                    |  |   |             |  |                         |  |   |          
|--------------------------------------------------- |  | - | ----------- |  | ----------------------- |  | - | ---------
|                                                    |  |   |             |  | For the Year Ended 2006 |  |   |          
|                                                    |  |   | Income      |  | Shares                  |  |   | Per-Share
|                                                    |  |   | (Numerator) |  | (Denominator)           |  |   | Amount   
|                                                    |  |   |             |  |                         |  |   |          
|Net income                                          |  | $ | 826,308     |  |                         |  |   |          
|Basic EPS                                           |  |   |             |  |                         |  |   |          
|Income available to common stockholders             |  | $ | 826,308     |  | 39,118,400              |  | $ | 0.02     
|                                                   
|Warrants                                            |  |   |             |  | 414,022                 |  |   |          
|Options                                             |  |   |             |  | 780,491                 |  |   |          
|Unvested employment agreement shares                |  |   |             |  | 62,260                  |  |   |          
|                                                   
|Diluted EPS                                         |  |   |             |  |                         |  |   |          
|Income available to common stockholders and assumed |  | $ | 826,308     |  | 40,375,173              |  | $ | 0.02     
|conversions                                         |  |   |             |  |                         |  |   |          
|                                                   
|                                                   
|                                                   
|                                                   
|                                                    |  |   |             |  | For the Year Ended 2005 |  |   |          
|                                                    |  |   | Income      |  | Shares                  |  |   | Per-Share
|                                                    |  |   | (Numerator) |  | (Denominator)           |  |   | Amount   
|                                                   
|Net income                                          |  | $ | 3,123,356   |  |                         |  |   |          
|Basic EPS                                           |  |   |             |  |                         |  |   |          
|Income available to common stockholders             |  | $ | 3,123,356   |  | 33,848,722              |  | $ | 0.09     
|                                                   
|Warrants                                            |  |   |             |  | 639,449                 |  |   |          
|Options                                             |  |   |             |  | 772,500                 |  |   |          
|                                                   
|Diluted EPS                                         |  |   |             |  |                         |  |   |          
|Income available to common stockholders and assumed |  | $ | 3,123,356   |  | 35,260,671              |  | $ | 0.09     
|conversions                                         |  |   |             |  |                         |  |   |          

57

---

The total weighted average shares outstanding for the diluted earning per share calculation for the year ended December 31, 2006 was 40,375,173. Total weighted average shares outstanding for the diluted earning per share calculation for the year ended December 31, 2005 was 35,260,671.

Share value
     
     Vesting Date
     
     
     
     Antidilutiveon
     
     
     
     
     
     warrants,Measurement
     
     
     
     
     
     options,Date
     
     
     
     
     
     pendingemploymentshares atDecember31, 2007Common SharesIssued andOutstanding atDecember 31, 2007
     
     
     
     
     
     40,181,301UnconvertedWarrants Issued:@$0.45
     
     $0.65
     
     Vested
     
     2,177,886@$0.45
     
     $0.41
     
     Vested
     
     1,500,000@$0.68
     
     $0.50
     
     Vested
     
     300,000@$1.36
     
     $0.50
     
     Vested
     
     7,740,000
     
     7,740.000Subtotal
     
     
     
     
     
     11,717,886Options Issued:@$0.17
     
     $0.23
     
     Vested
     
     900,000@$1.03
     
     $1.03
     
     Vested
     
     30,000
     
     30,000@$1.05
     
     $1.03
     
     Vested
     
     10,000
     
     10,000Subtotal
     
     
     
     
     
     940,000Awards of stockpending underemployment contracts2007
     
     190,0002008
     
     454,9182009
     
     425,0002010
     
     250,000Subtotal
     
     
     
     
     
     1,319,918Total
     
     
     
     
     
     54,159,105
     
     7,780,000




|
|



58

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Recently Issued Accounting Pronouncements

In June 2006, FASB Interpretation No. 48, Accounting for Uncertainty in Income Taxes. This interpretation clarifies the accounting for uncertainty in income taxes recognized by prescribing a recognition threshold and measurement attribute for the financial statement recognition and measurement of a tax position taken or expected to be taken in a tax return. The Interpretation also provides guidance on derecognition, classification, interest and penalties, accounting in interim periods and disclosure. The Interpretation is effective for fiscal years beginning after December 15, 2006. The Company adopted this Interpretation for the year ended December 31, 2007.

In September 2006, FASB issued SFAS No. 157, Fair Value Measurements. This Statement defines fair value, establishes a framework for measuring fair value in generally accepted accounting principles (GAAP) and expands disclosures about fair value measurements. The Statement does not require any new fair value measurements but could change the current practice in measuring current fair value measurements. The Statement is effective for fiscal years beginning after November 15, 2007. The Company does not anticipate that the adoption of this Statement will have a material impact on the Companys consolidated financial statements.

In September 2006, the FASB issued SFAS No. 158, Employers Accounting for Defined Benefit Pension and Other Postretirement Plans. The Company does not anticipate that the adoption of this Statement will have a material impact on the Company's consolidated financial statements.

In February 2007, the FASB issued SFAS No. 159, The Fair Value Option for Financial Assets and Financial Liabilities (SFAS 159) which permits entities to choose to measure many financial instruments and certain other items at fair value that are not currently required to be measured at fair value. SFAS 159 will be effective for us on January 1, 2008. The Company is currently evaluating the impact of adopting SFAS 159 on the Companys financial position, cash flows, and results of operations.

Stock-Based Compensation

During 2007, there were options for 10,000 shares, at an option price of $1.05, granted. The options expire in five years from date of issuance and were immediately vested. Using the Black Scholes Model with the monthly stock-prices as variable from April 2002, the call option value of these options were calculated to be $1.05. $10,546 was expensed during 2007 relative to these options. In connection with the adoption of SFAS123R we assessed our valuation technique and related assumptions. Consistent with the provisions of SFAS 123R, Staff Accounting Bulletin #107 (SAB 107), we estimated the fair value of stock option on the date of grant using the Black Scholes Options Valuation Model and the following assumptions: Risk free interest rate of 4.54%, Expected life of 2.5 years, Dividend rate of 0% and expected volatility of 283.137% .

Effective January 1, 2006, the Company adopted Statement of Financial Accounting Standards No. 123 (revised 2004), Share-Based Payment (SFAS 123R), which requires the Company to measure the cost of employee services received in exchange for all equity awards granted including stock options based on the fair market value of the award as of the grant date. SFAS 123R supersedes Statement of Financial Accounting Standards No. 123, Accounting for Stock-Based Compensation (SFAS 123) and Accounting Principles Board Opinion No. 25, Accounting for Stock Issued to Employees (APB 25). The Company has adopted SFAS 123R using the modified prospective method. Accordingly, prior period amounts have not been restated. Under the modified prospective method, stock options awards that are granted, modified or settled after December 31, 2005 will be valued at fair value in accordance with provisions of SFAS 123R a

nd recognized on a straight line basis over the service period of the entire award. At December 31, 2005, all outstanding stock options were fully vested.

Prior to January 1, 2006, the Company accounted for stock based compensation under the recognition and measurement provisions of APB 25 and related interpretations, as allowed by SFAS 123. The Company had adopted the disclosure-only provisions of SFAS 123 as amended by SFAS No. 148, Accounting for Stock-Based Compensation  Transition and Disclosure. Prior to 2006, the Company accounted for stock-based compensation in accordance with APB 25 using the intrinsic value method, which did not require compensation cost to be recognized for the Companys stock options as all options previously granted had an exercise price equal to the market value of the underlying common stock on the date of the grant. There were no options granted in the year ended December 31, 2005 nor was there vesting of prior year option grants. Therefore, there was no pro-forma effect for the year ended December 31, 2005.

4.    SEGMENT INFORMATION

The company has divided its operations into the following reportable segments: (i) Aircraft maintenance, repair, and overhaul; (ii) Aircraft Brokerage; (iii) and Part sales. Each segment represents distinct product lines, marketing, and management of its business. Limited other services for each company, which represent a small percentage of income, have been shown in the aggregate.

The reporting segments follow the same accounting policies used for the Companys consolidated financial statements and described in the summary of significant accounting policies.

59

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Selected information by business segment is presented in the following tables for the years ended December 31, 2007, December 31, 2006 and December 31, 2005.

|                                                 |  |  |  |             |  |  |  |             |  |  |  |            
|------------------------------------------------ |  |  |  | ----------- |  |  |  | ----------- |  |  |  | -----------
|                                                 |  |  |  | 2007        |  |  |  | 2006        |  |  |  | 2005       
|                                                
|                                                 |  |  |  | ($millions) |  |  |  | ($millions) |  |  |  | ($millions)
|                                                
|Segment sales:                                   |  |  |  |             |  |  |  |             |  |  |  |            
|Aircraft maintenance                             |  |  |  | 14.365      |  |  |  | 24.331      |  |  |  | 19.135     
|Aircraft trading                                 |  |  |  | 7.900       |  |  |  | 3.223       |  |  |  | 13.551     
|Part sales                                       |  |  |  | 5.723       |  |  |  | 11.216      |  |  |  | 10.684     
|Other                                            |  |  |  | .239        |  |  |  | 2.354       |  |  |  | 2.155      
|                                                
|Sub Total                                        |  |  |  | 28.227      |  |  |  | 41.124      |  |  |  | 45.525     
|                                                
|Elimination of intersegment sales                |  |  |  | -3.483      |  |  |  | -6.582      |  |  |  | -4.296     
|                                                
|Total consolidated sales                         |  |  |  | 24.744      |  |  |  | 34.542      |  |  |  | 41.229     
|                                                
|                                                
|Operating income:                                |  |  |  |             |  |  |  |             |  |  |  |            
|Aircraft maintenance                             |  |  |  | 3.606       |  |  |  | 4.554       |  |  |  | 2.232      
|Aircraft trading                                 |  |  |  | 1.052       |  |  |  | .033        |  |  |  | 3.531      
|Part sales                                       |  |  |  | 1.152       |  |  |  | 2.429       |  |  |  | 2.783      
|Other                                            |  |  |  | .232        |  |  |  | 1.585       |  |  |  | 1.625      
|                                                
|Sub total                                        |  |  |  | 6.042       |  |  |  | 8.601       |  |  |  | 10.171     
|                                                
|Selling, general, administrative expense         |  |  |  | -10.909     |  |  |  | -8.591      |  |  |  | -7.780     
|Penalties                                        |  |  |  | --          |  |  |  | -.012       |  |  |  | -.001      
|Other, net                                       |  |  |  | -.896       |  |  |  | -.584       |  |  |  | .012       
|Share of Jetglobal net income (aircraft trading) |  |  |  | .215        |  |  |  | 1.809       |  |  |  | 1.111      
|Gain on sale of interest in Jetglobal            |  |  |  | .488        |  |  |  |             |  |  |  |            
|                                                
|Consolidated earnings/(loss) before taxes        |  |  |  | -5.060      |  |  |  | 1.213       |  |  |  | 3.489      
|                                                
|Interest income by segment                       |  |  |  |             |  |  |  |             |  |  |  |            
|Aircraft maintenance                             |  |  |  | .367        |  |  |  | .029        |  |  |  |            
|Aircraft trading                                 |  |  |  |             |  |  |  | .011        |  |  |  |            
|Part sales                                       |  |  |  |             |  |  |  |             |  |  |  |            
|Corporate                                        |  |  |  | .020        |  |  |  | .036        |  |  |  | .246       
|Total interest income                            |  |  |  | .387        |  |  |  | .076        |  |  |  | .246       
|                                                
|Interest expense by segment                      |  |  |  |             |  |  |  |             |  |  |  |            
|Aircraft maintenance                             |  |  |  | .757        |  |  |  | .059        |  |  |  |            
|Aircraft trading                                 |  |  |  |             |  |  |  | .083        |  |  |  |            
|Part sales                                       |  |  |  | .008        |  |  |  | .005        |  |  |  |            
|Corporate                                        |  |  |  | .497        |  |  |  | .440        |  |  |  | .387       
|Total interest expense                           |  |  |  | 1.262       |  |  |  | .587        |  |  |  | .387       

|                                         |  |             |  |             |  |            
|---------------------------------------- |  | ----------- |  | ----------- |  | -----------
|                                         |  | 2007        |  | 2006        |  | 2005       
|                                         |  | ($millions) |  | ($millions) |  | ($millions)
|                                        
|Depreciation and amortization by segment |  |             |  |             |  |            
|Aircraft maintenance                     |  | .418        |  | .410        |  | .330       
|Aircraft brokerage                       |  |             |  |             |  |            
|Part sales                               |  |             |  |             |  |            
|                                        
|Corporate                                |  | .146        |  | .335        |  | .322       
|Total                                    |  | .564        |  | .745        |  | .652       

60

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|                      |        |  |   |        |  |   |       
|--------------------- | ------ |  | - | ------ |  | - | ------
|Net asset values:     |        |  |   |        |  |   |       
|Aircraft maintenance  | 8.617  |  |   | 8.872  |  |   | 6.986 
|Aircraft trading      | 8.989  |  |   | 1.308  |  |   | 1.225 
|Part sales            | 6.939  |  |   | 6.822  |  |   | 8.147 
|                     
|Corporate             | 5.149  |  |   | 11.472 |  |   | 8.697 
|Total                 | 29.694 |  |   | 28.474 |  |   | 25.055
|                     
|                     
|Capital expenditures: |        |  |   |        |  |   |       
|Aircraft maintenance  | .036   |  |   | .320   |  |   | .345  
|Aircraft brokerage    |        |  |   |        |  |   |       
|Part sales            |        |  |   |        |  |   |       
|                     
|Corporate             | .050   |  |   | .167   |  |   | .155  
|Total                 | .086   |  | * | .487   |  | * | .500  

*Includes $.011in 2007 and $.300 in 2006 purchased through capital leases (non-cash).

The Companys facilities and assets are primarily located in the United States. During 2006, the Company formed a Mexican corporation, Hamilton SA de C.V. Minimal supplies are secured from local dealers using the foreign currency but all major revenue and expense transactions are transacted in U.S. dollars. The Company sells and ships to several foreign countries. All foreign revenues are collected and recorded in U.S. dollars. Geographic information regarding sales to foreign countries is presented in the following table:

Year
     
     
     Year
     
     
     YearEnded
     
     
     Ended
     
     
     EndedDecember 31, 2007
     
     
     December 31, 2006
     
     
     December 31, 2005Dollars
     
     
     Dollars
     
     
     DollarsAfghanistan
     
     $
     897,905Angola
     
     
     63,524
     
     $
     54,232
     
     $
     62,028Australia
     
     
     
     
     
     
     
     
     1,700Belgium
     
     
     55,819Brazil
     
     
     
     
     
     
     
     
     5,100Canada
     
     
     150
     
     
     75
     
     
     688Cambodia
     
     
     
     
     
     73,041Columbia
     
     
     
     
     
     
     
     
     24,904Costa Rica
     
     
     3,152Germany
     
     
     
     
     
     1,220
     
     
     28,025Hong Kong
     
     
     30Indonesia
     
     
     2,450
     
     
     
     
     
     835Ireland
     
     
     
     
     
     
     
     
     224,141Israel
     
     
     42,057
     
     
     25Italy
     
     
     158
     
     
     955
     
     
     62,357Jordan
     
     
     4,629
     
     
     2,032,460
     
     
     2,468,915Kenya
     
     
     2,320Korea
     
     
     
     
     
     154,010Lebanon
     
     
     107,344
     
     
     290,088
     
     
     264,681Lithuania
     
     
     98,473Malawi
     
     
     
     
     
     111,000
     
     
     868,943Mexico
     
     
     3,270,844
     
     
     6,942,499
     
     
     2,810,753Nigeria
     
     
     
     
     
     
     
     
     308,755Pakistan
     
     
     285,520
     
     
     68,000
     
     
     382,795Philippines
     
     
     
     
     
     230,916Romania
     
     
     
     
     
     
     
     
     27,000Scotland
     
     
     
     
     
     
     
     
     30,969Singapore
     
     
     48,973South Africa
     
     
     
     
     
     
     
     
     17,345Spain
     
     
     
     
     
     32,600
     
     
     2,200Ukraine
     
     
     13,680United Arab Emirates
     
     
     66,869
     
     
     111,848
     
     
     9,191,462United Kingdom
     
     
     4,360
     
     
     98,383
     
     
     61,654Venezuela
     
     
     
     
     
     
     
     
     39,704TOTALS
     
     $
     4,968,257
     
     $
     10,201,352
     
     $
     16,884,954


61

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5.    EQUITY IN NET ASSETS AND ADVANCES TO AFFILIATES

On August 26, 2005, the Company together with BCI Aircraft Leasing, (BCI), formed a joint venture, Jetglobal, LLC, a Delaware limited liability company. This was a special purpose LLC formed to acquire and remarket commercial jet aircraft. BCI was primarily responsible for the marketing aspects of Jetglobal while the Company was responsible for the technical,repair and maintenance aspects associated with remarketing purchased aircraft. The Company invested an initial amount of $1,125,000 for a 30% membership interest and BCI invested an initial amount of $2,625,000 for a 70% membership interest in Jetglobal. Pursuant to the terms of Jetglobals Operating Agreement, although the Company had a 30% membership and profit interest, it was only respon

sible for 25% of the costs and expenses associated with Jetglobal including any business transactions. Management has transferred its ownership interest in Jetglobal, LLC to the other partner, BCI Aircraft Leasing, in consideration for aircraft inventory and a trailing interest in certain claims of Jetglobal against third parties. The parties executed a final agreement and settlement on April 20, 2007, which was revised on June 29, 2007. The terms of the final agreement with BCI did not result in any impairment to the Company. The final agreement calls for a transfer of 6 aircraft with a total value of $8,650,000 and a trailing interest of 18% in the Delta Airlines bankruptcy claim originally estimated to be valued at $2,118,461. (There is also an 18% trailing interest in a lawsuit against AFG for which no value can be estimated at this time.) The gain on this transaction, recorded during the second quarter of 2007 was $27,210. During the third quarter of 2007, BCI, as the appropriately authorized party, beg

an negotiating an agreement with a third party to cash-out the Delta claim. As a result of this transaction, the Companys share of the Delta claim is $622,000. Additionally, during the third quarter of 2007, a reclassification of funds received from BCI in earlier periods reduced the amount due from investee partner by $1,957,692. These funds had been applied to BCIs regular account receivable with HAT rather than to its due from investee partner account. These two events resulted in a revised amount of gain to the Company from the divestiture of its interest in Jetglobal to $488,441; $466,231 was recorded in the third quarter of 2007.

The table below shows the items received by Global as part of the settlement as well as the calculation of the gain on this transaction.

Items/Cash to Global undersettlement:Aircraft N937AS
     
     $
     1,150,000
     
     
     2ndQuarter 2007Aircraft N302DL
     
     $
     1,500,000
     
     
     2ndQuarter 2007Aircraft N305DL
     
     $
     1,500,000
     
     
     2ndQuarter 2007Aircraft N306DL
     
     $
     1,500,000
     
     
     2ndQuarter 2007Aircraft N308DL
     
     $
     1,500,000
     
     
     2ndQuarter 2007Aircraft N312DL
     
     $
     1,500,000
     
     
     4thQuarter 2007Delta claim
     
     $
     622,000
     *Total
     
     $
     9,272,000
     
     
     
     
     $
     9,272,000Application to:Equity in net assets and
     
     $
     6,428,895
     *advances to affiliatesDue from equity investee
     
     $
     2,354,664partnerTotal
     
     $
     8,783,559
     
     
     
     
     $
     8,783,559GAIN
     
     
     
     
     
     
     
     $
     488,441


*As of December 31, 2007, the only outstanding amount is the amount received by BCI for the Delta claim. On December 10, 2007, the Company received $150,000. The remaining $472,000 is to be paid in three installments: two equal installments of $150,000 and a final installment of $172,000. Installments are due each 30 days, commencing January 10, 2008.

**See table below for 2007 activity.

62

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|                                                                                           |  |   |                   |  |   |         |  |   |        |  |   |          
|------------------------------------------------------------------------------------------ |  | - | ----------------- |  | - | ------- |  | - | ------ |  | - | ---------
|Rollforward of investment balance at December 31, 2006 through the date of the settlement: |  |   |                   |  |   |        
|                                                                                          
|                                                                                           |  |   | December 31, 2006 |  |   |         |  |   |        |  |   |          
|                                                                                           |  |   | Balance           |  |   | Debit   |  |   | Credit |  |   | Balance  
|Equity in net assets of                                                                    |  |   |                   |  |   |         |  |   |        |  |   |          
|and advances to affiliates                                                                 |  | $ | 6,063,067         |  |   |         |  |   |        |  | $ | 6,063,067
|                                                                                           |  |   |                   |  |   |         |  |   |        |  |   |          
|Globals share of                                                                          |  |   |                   |  |   |         |  |   |        |  |   |          
|Jetglobals net income,                                                                    |  |   |                   |  |   |         |  |   |        |  |   |          
|                                                                                           |  |   |                   |  |   |         |  |   |        |  |   |          
|1stQtr 2007                                                                                |  |   |                   |  | $ | 214,800 |  |   |        |  | $ | 6,277,867
|                                                                                           |  |   |                   |  |   |         |  |   |        |  |   |          
|Investment in Jetglobal                                                                    |  |   |                   |  | $ | 200,000 |  |   |        |  | $ | 6,477,867
|                                                                                           |  |   |                   |  |   |         |  |   |        |  |   |          
|Distribution to Global                                                                     |  |   |                   |  |   |         |  | $ | 48,972 |  | $ | 6,428,895

6.     GOODWILL

The Company evaluates the carrying value of goodwill annually and between annual evaluations if events occur or circumstances change that would more likely than not reduce the fair value of a reporting unit below its goodwill-carrying amount. Such circumstances could include but are not limited to:

| |    |  |                                                                     
| | -- |  | --------------------------------------------------------------------
| | 1. |  | a significant adverse change in legal factors or in business climate
| | 2. |  | unanticipated competition                                           
| | 3. |  | an adverse action or assessment by a regulator                      

When evaluating whether goodwill is impaired, the Company compares the fair value of the reporting unit to which the goodwill is assigned to that units carrying amount, including goodwill. If the carrying amount of a reporting unit exceeds its fair value, then the amount of the impairment loss must be measured. The total of the implied fair value of all of the other assets and liabilities of the unit, based on their fair value, less the total amount assigned to those assets and liabilities is the implied fair value of goodwill. An impairment loss would be recognized when the carrying amount of goodwill exceeds its implied fair value.

7.    INVENTORY

Inventories include new, used parts and parts stripped from aircraft. These stripped parts inventory items are initially carried at original cost basis determined on the pro-rata fair value of the individual parts based on market or catalog pricing. All aircraft parts inventory are grouped as Inventory and accounted under Current Assets category. This is based on standard aviation industry practice of showing all aircraft parts under a single line item of inventory. Aircraft parts typically have more than one year of life. Rotable parts have the same life as the aircraft. Repairable parts can be repaired several times over the life of the aircraft and installed on the aircraft. It has been and remains our policy to expense any items that we determine to be obsolete, damaged or unlikely to sell. The Company has an allowance for slow moving and obsolete parts inventory in the amount of $125,980. This allowan

ce was expensed during 2007.

The Company reviews the market value of inventories whenever events and circumstances indicate that the carrying value of inventories may not be recoverable from the estimated future sales price less cost of disposal and normal gross profit. In cases where the market values are less than the carrying value, a write down is recognized equal to an amount by which the carrying value exceeds the market value of inventories.

Inventories consisted of the following:

2007
     
     
     2006Maintenance Hardware
     $
     912,745
     
     $
     1,030,465Parts for Resale
     $
     6,527,947
     
     $
     6,554,455Aircraft & Engine
     $
     8,988,809
     
     $
     267,771$
     16,429,501
     
     $
     7,852,691


Management reviews listed inventory items to determine whether there are slow moving or obsolete items. At December 31, 2006, it was managements determination that the carrying value of the inventory items is appropriate and that there were no items requiring an allowance because the carrying value exceeds net realizable value.

The Significant increase in inventory valve was due to the receipt of aircraft upon disposal by the Company of its interest in Jetglobal (see Note 5).

63

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|                              |  |   |           |  |   |          
|----------------------------- |  | - | --------- |  | - | ---------
|8.   PROPERTY AND EQUIPMENT   |  |   |          
|                              |  |   | 2007      |  |   | 2006     
|                              |  |   |           |  |   |          
|Gross Asset Values            |  |   |           |  |   |          
|Land and improvements         |  |   | 25,094    |  | $ | 25,094   
|Buildings and improvements    |  |   | 208,542   |  |   | 201,080  
|Vehicles                      |  |   | 66,028    |  |   | 78,161   
|Machinery and equipment       |  |   | 2,082,521 |  |   | 2,058,291
|Computers and software        |  |   | 145,602   |  |   | 332,755  
|Other office equipment        |  |   | 332,155   |  |   | 112,638  
|Equipment under capital lease |  |   | 313,274   |  |   | 305,219  
|Subtotal                      |  |   | 3,173,216 |  |   | 3,113,238
|Less accumulated depreciation |  |   | 2,148,379 |  |   | 1,592,201
|                             
|Property and equipment, Net   |  | $ | 1,024,837 |  | $ | 1,521,037

During 2007, 2006 and 2005 depreciation expense was $564,071, $582,710 and $489,818 respectively.

Property, plant and equipment include gross assets acquired under capital leases of and $305,219 and $316,574 at December 31, 2006 and December 31, 2007, respectively. Related amortization, which is included in accumulated depreciation, was $24,385 and $88,055 at December 31, 2006 and December 31, 2007, respectively. Net asset value of machinery and equipment acquired under capital leases totaled $235,670 and net asset value of office equipment acquired under capital leases totaled $77,604 at December 31, 2007. Amortization of assets under capital leases is included in depreciation expense.

9.    LEASES AND CAPITAL LEASES

Globals wholly owned subsidiary, HAT, currently conducts operations on leased property at the Tucson International Airport, (TIA). Currently, World Jet is occupying space under this same lease. The lease is a one-year lease commencing March 1, 2005 and permits HAT to apply for two additional one-year options. TIA is implementing a Master Plan for airport development, which precludes issuing a long-term lease to HAT, but will not affect HATs facilities for at least five years. There is also executive office space leased at 6451 South Country Club under a five-year lease. Below is a table showing the total of lease commitments at December 31, 2007.

|                |  |           |  |           |  |           |  |           |  |           |  |        
|--------------- |  | --------- |  | --------- |  | --------- |  | --------- |  | --------- |  | -------
|Operating       |  |           |  |           |  |           |  |           |  |           |  |        
|Leases          |  |           |  |           |  |           |  |           |  |           |  |        
|                |  | Min Lease |  | Min Lease |  | Min Lease |  | Min Lease |  | Min Lease |  | TOTALS 
|                |  | Payments  |  | Payments  |  | Payments  |  | Payments  |  | Payments  |  |        
|                |  | 2008      |  | 2009      |  | 2010      |  | 2011      |  | 2012      |  |        
|                |  | $         |  | $         |  | $         |  | $         |  | $         |  | $      
|                |  |           |  |           |  |           |  |           |  |           |  |        
|Premises 6901   |  |           |  |           |  |           |  |           |  |           |  |        
|S. Park         |  | 318,228   |  | 53,038    |  |           |  |           |  |           |  | 371,266
|                |  |           |  |           |  |           |  |           |  |           |  |        
|Office space    |  |           |  |           |  |           |  |           |  |           |  |        
|6451 S. Country |  |           |  |           |  |           |  |           |  |           |  |        
|Club            |  | 39,628    |  | 41,006    |  | 42,436    |  | 36,385    |  |           |  | 159,455
|                |  |           |  |           |  |           |  |           |  |           |  |        
|Inventory       |  |           |  |           |  |           |  |           |  |           |  |        
|storage 7001 S  |  |           |  |           |  |           |  |           |  |           |  |        
|Park            |  | 210,912   |  | 35,152    |  |           |  |           |  |           |  | 246,064
|               
|Total           |  |           |  |           |  |           |  |           |  |           |  |        
|Operating       |  |           |  |           |  |           |  |           |  |           |  |        
|Lease           |  |           |  |           |  |           |  |           |  |           |  |        
|Commitments     |  | 568,768   |  | 129,196   |  | 42,436    |  | 36,385    |  |           |  | 776,785

64

---

The Company has entered into capital lease agreements to facilitate the purchase of various types of equipment. Below is a table showing the total lease commitments under those agreements and the present value of those lease commitments.

|              |  |           |  |           |  |           |  |           |  |           |  |        
|------------- |  | --------- |  | --------- |  | --------- |  | --------- |  | --------- |  | -------
|Capital       |  |           |  |           |  |           |  |           |  |           |  |        
|Leases        |  |           |  |           |  |           |  |           |  |           |  |        
|             
|              |  | Min Lease |  | Min Lease |  | Min Lease |  | Min Lease |  | Min Lease |  | TOTALS 
|              |  | Payments  |  | Payments  |  | Payments  |  | Payments  |  | Payments  |  |        
|              |  | 2008      |  | 2009      |  | 2010      |  | 2011      |  | 2012      |  |        
|              |  | $         |  | $         |  | $         |  | $         |  | $         |  | $      
|              |  |           |  |           |  |           |  |           |  |           |  |        
|Telephone     |  |           |  |           |  |           |  |           |  |           |  |        
|systems       |  | 15,699    |  | 15,699    |  | 15,699    |  | 9,367     |  |           |  | 56,464 
|              |  |           |  |           |  |           |  |           |  |           |  |        
|Office        |  |           |  |           |  |           |  |           |  |           |  |        
|equipment     |  | 7,641     |  | 6,557     |  | 402       |  |           |  |           |  | 14,600 
|              |  |           |  |           |  |           |  |           |  |           |  |        
|A/C           |  |           |  |           |  |           |  |           |  |           |  |        
|maintenance   |  |           |  |           |  |           |  |           |  |           |  |        
|equipment     |  | 58,470    |  | 58,470    |  | 58,470    |  | 34,107    |  |           |  | 209,517
|              |  |           |  |           |  |           |  |           |  |           |  |        
|             
|Total Capital |  |           |  |           |  |           |  |           |  |           |  |        
|Lease         |  |           |  |           |  |           |  |           |  |           |  |        
|Commitments   |  | 81,810    |  | 80,726    |  | 74,571    |  | 43,474    |  |           |  | 280,581
|              |  |           |  |           |  |           |  |           |  |           |  |        
|Present Value |  |           |  |           |  |           |  |           |  |           |  |        
|of Capital    |  |           |  |           |  |           |  |           |  |           |  |        
|Lease         |  |           |  |           |  |           |  |           |  |           |  |        
|Commitments   |  | 62,038    |  | 67,282    |  | 67,366    |  | 36,043    |  |           |  | 232,729

Rent expense paid during the years ended December 31, 2007, 2006 and 2005 was $598,639, $821,277 and $720,263 respectively.

10.    SHAREHOLDERS' EQUITY

On August 3, 2005, warrants were converted to 7,200,000 shares of common stock at $.68 per share.

On August 30, 2005, warrants were converted to 399,000 shares of common stock under the non-cash conversion terms of the original agreement of issue. No expense was recorded relative to this transaction.

On September 14, 2005, outstanding warrants were converted to 22,812 shares of common stock under the non-cash conversion terms of the original agreement of issue. No expense was recorded relative to this transaction.

On November 23, 2005, 60,000 shares were issued to employees pursuant to 2004 employment agreements. The shares had been fully expensed at issuance.

In the year ended December 31, 2005 the Company granted 200,000 shares under restricted stock awards to two directors. The price at measurement date was $.80 per share 100,000 shares were vested in 2005, $80,000 was expensed in 2005 and 100,000 shares were vested in 2006 and $80,000 was expensed at a rate of 1/12 per month during 2006.

On November 23, 2005 15,000 share of common stock were issued to an employee as a bonus. The price per share at measurement date was $1.30 and the Company has recorded a $19,500 expense in connection with the transaction.

On December 27, 2005, outstanding warrants were converted to 21,017 shares of common stock under the non-cash conversion terms of the original agreement of issue.

During the first quarter of 2006, 10,000 shares of common stock were issued to a new director as a signing bonus. The price of the stock at measurement date was $1.39.

On March 9thof 2006, 100,000 shares of common stock were issued pursuant to the completion of services contracted for under two separate agreements. The expense under the agreement was $70,000.00.

On April 4, 2006, 96,154 shares of common stock were issued for a consideration of $96,154. These shares were relative to warrants that had been outstanding at $1.00 per share.

On April 7, 2006, 100,000 shares of common stock were issued as compensation for outside consultancy services. The services are to be performed during 2006 and 1/12 of the related expense was taken monthly during 2006. The value of the shares at measurement date was $153,000.

On May 9, 2006, 165,814 shares of common stock were issued under the non-cash provisions of warrants @$.34 per share. The non-cash calculation eliminated all of the availability of 219,000 shares under the warrants.

65

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Under the terms of a new three-year employment contract, which begins June 1, 2006, 75,000 shares of common stock vested on May 31, 2007, 100,000 shares of common stock will vest on May 31, 2008 and 125,000 shares of common stock will vest on May 31, 2009. The measurement date for this transaction is May 3, 2006.

Under the terms of a new three-year employment agreement, which begins June 1, 2006, 10,000 shares of common stock vested during the first quarter of 2007 and 10,000 shares will vest on each of two anniversary dates beginning June 1, 2007, (30,000 shares). The value of the shares at measurement date was $36,900, which will be expensed in equal monthly amounts over the term of the agreement.

Under the terms of a new employment contract, which began July 1, 2006, 20,000 shares of common stock were issued to an employee on August 28, 2006. The agreement calls for 20,000 shares to be earned during the second year and issued July 1, 2007 and 20,000 shares to be earned during the third year and issued July 1, 2008. The price of the stock at measurement date was $1.20 per share. Expenses for the stock will be entered into the financial statements on a monthly basis during the three-year term of the agreement.

On August 8, 2006, 125,124 shares of common stock were issued under the non-cash provisions of warrants @ $0.68 per share. The non-cash calculation eliminated all of the availability of 240,000 shares under the warrants. No expense was recorded relative to this transaction.

On August 28, 2006, 270,000 shares of common stock were issued pursuant to the vesting of shares granted under employment contracts entered into in 2004. The price of the shares at measurement date was $0.60 pre share. The appropriate expense has been entered into the Companys financial statements, on a monthly basis, during the two-year vesting period.

On September 1, 2006, 20,000 shares of common stock were issued to two directors, 10,000 shares each, under the terms of the director compensation plan approved by the shareholders in the annual meeting held May of 2006. The price of these shares at measurement date was $1.35 per share. Appropriate expenses have been recorded in the Companys financial statements for the third quarter of 2006

Under the terms of a new three-year employment agreement, which begins December 1, 2006, 10,000 shares of common stock will vest on each of three anniversary dates beginning December 1, 2007, (30,000 shares). The value of the shares at measurement date was $29,100, which will be expensed in equal monthly amounts over the term of the agreement.

On December 29, 2006, 62,500 shares of common stock were issued under an employment agreement. The price at measurement date was $.95. The terms of the employment contract, originally dated June 1, 2006 were amended at this time and 62,500 shares will vest and subsequently be issued each six months during the contract term for a total of $375,000 shares.

On January 24, 2007, warrants were converted under the non-cash conversion terms of the original agreement of issue. A warrant for 95,192 shares was reduced to 48,494 shares under the cashless exercise formula and 48,494 shares were issued. No expense was recorded for this transaction.

On March 29, 2007, 10,000 shares of common stock were issued from the Companys registered 2003 Employee Stock Compensation Plan under the terms of a Directors agreement. The value of the shares had been fully expensed when earned.

On May 15, 2007, 210,000 shares of common stock were issued. These shares included 10,000 shares of common stock that were issued from the Companys registered 2003 Employee Stock Compensation Plan pursuant to a 2006 employment agreement. The value of the shares was $1.23 per share resulting in an expense in the amount of $12,300. The remaining 200,000 shares of common stock were issued in conjunction with two new employment agreements dated April 9, 2007, the measurement date. The value of the shares was $.60 each, resulting in expense in the amount of $120,000 during the second quarter of 2007.

On May 25, 2007, 20,000 shares of common stock were issued from the Companys registered 2003 Employee Stock Compensation Plan pursuant to an employment agreement. The value of the stock at measurement date was $1.01 per share. The Company recorded share-based compensation of $20,200 during the second quarter of 2007.

On June 4, 2007, the company issued 100,000 shares of common stock from the Companys registered 2003 Employee Stock Compensation Plan pursuant to a separation agreement with a former employee. The value of the stock at measurement date, May 25, 2007, was $.75 per share and a total of $75,000 was expensed in the second quarter relative to this transaction.

On June 8, 2007, the Company issued 75,000 restricted shares of common stock for services to be rendered under the terms of an agreement for services. The value of the stock at measurement date was $80,250, ($1.07 per share), which Management determined to be the value of the services to be rendered. The Company is recording the expense over the duration of the agreement.

On June 8, 2007, the Company issued 10,000 shares of common stock from the Companys registered2003 Employee Stock Compensation Plan pursuant to vesting under a 2006 employment agreement. The stock had been expensed fully at issuance.

On September 14, 2007, The Company issued 120,000 shares of common stock from the Companys registered 2003 Employee Stock Compensation Plan pursuant to an agreement with a provider of legal services. The closing price of the stock on the date of issue was $0.79. The agreement calls for the stock to be issued as a substitute payment for a portion of existing attorneys fees and costs. The issuance of the stock reduces the accounts payable account with the legal firm in the amount of $79,226. The Company recorded an additional $15,574 of expense in connection with this transaction.

66

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Options

In January 2005, 50,000 options, issued as compensation for outside consultancy services, were exercised at the option price of $.30 per share.

During 2006, there were options for 30,000 shares at an option price of $1.03 granted. The options are good for a term of five years and were immediately vested. Using the Black Scholes Model with the monthly stock prices as variable from April 2002, the call option value of these options were calculated to be $1.09. $32,600 was expensed during 2006 relative to these options. In connection with the adoption of SFAS123R we assessed our valuation technique and related assumptions. Consistent with the provisions of SFAS123R, Staff Accounting Bulletin #107 (SAB 107), we estimated the fair value of stock options on the date of grant using the Black Scholes Options Valuation Model and the following assumptions: Risk free interest rate of 4.76%, Expected Life of 2.5 years, Dividend rate of 0% and expected volatility of 91.98% .

On March 9, 2007, options for 10,000 shares, at an exercise price of $1.05 per share, granted to a Director pursuant to a compensation agreement. The options are exercisable for a term of five years and were immediately vested. Using the Black Scholes Model, the call option value of these options was calculated to be $1.05. $10,546 was expensed during 2007 relative to these options. Consistent with the provisions of SFAS 123R, Staff Accounting Bulletin #107 (SAB 107), we estimated the fair value of stock option on the date of grant using the following assumptions: Risk free interest rate of 4.54%, Expected life of 2.5 years, Dividend rate of 0% and Expected volatility of 283.137% .

On December 20, 2007, options for 1,500,000 shares at an exercise price of $0.45 per share were granted as part of a Debenture Agreement discussed in these financial statements under Note 12,Notes Payable. The options are exercisable for a term of five years and were immediately vested. Using the Black Scholes Model, the call option value of these options was calculated to be $0.39. $581,282 was expensed during 2007 relative to these options. Consistent with the provisions of SFAS 123R, Staff Accounting Bulletin #107 (SAB 107), we estimated the fair value of stock option on the date of grant using the following assumptions: Risk free interest rate of 3.43%, Expected life of 2.5 years, Dividend rate of 0% and Expected volatility of 170.247% .

On December 20, 2007, warrants for 1,040,866 shares at an exercise price of $1.00 per share and warrants for 1,137,020 shares at an exercise price of $1.36 per share were repriced under the terms of the warrants that were triggered by the issuance discussed above to an exercise price of $0.45 per share. These options are fully vested and are exercisable until September 2, 2009.

67

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The following table shows the shares issued for non-cash transactions, other than warrants, and the expense recorded in each of the years 2005, 2006, 2007 as well as the total recognizable expense of each transaction:

|                                    |    |  |           |  |   |                 |  |   |                   |  |             |    |  |                |  |   |  |                |  |   |                 |  |   |         |  |   |         |  
|----------------------------------- | -- |  | --------- |  | - | --------------- |  | - | ----------------- |  | ----------- | -- |  | -------------- |  | - |  | -------------- |  | - | --------------- |  | - | ------- |  | - | ------- | -
|COMMON STOCK  SHARE-BASED PAYMENTS
|                                    |    |  |           |  |   |                 |  |   |                   |  |             |    |  |                |  |   |  |                |  |   |                 |  |   |         |  |   |         |  
|                                    |    |  |           |  |   |                 |  |   |                   |  |             |    |  |                |  |   |  |                |  |   |                 |  |   |         | 
|                                    |    |  |           |  |   | Price of shares |  |   | Total Fair Value/ |  |             |    |  |                |  |   |  | Date of Share/ |  |   |                 |  |   |         | 
|                                    |    |  | Shares    |  |   | (measurement    |  |   | Expense to be     |  | Measurement |    |  |                |  |   |  | Option         |  |   |                 |  |   |         | 
|                                    |    |  | granted   |  |   | date)           |  |   | recognized        |  | date        |    |  | Shares issued  |  |   |  | Issuance       |  |   | Amount expensed |  |   |         | 
|                                    |    |  |           |  |   |                 |  |   |                   |  |             |    |  |                |  |   |  |                |  |   | 2005            |  |   | 2006    |  |   | 2007    |  
|Third parties,                      |    |  |           |  |   |                 |  |   |                   |  |             |    |  |                |  |   |  |                |  |   |                 |  |   |         |  |   |         |  
|for services:                       |    |  |           |  |   |                 |  |   |                   |  |             |    |  |                |  |   |  |                |  |   |                 |  |   |         |  |   |         |  
|                                    |    |  | 1,200,000 |  | $ | 0.18            |  | $ | 216,000           |  | 10/15/2003  | *  |  | 1,200,000      |  |   |  | 10/23/2003     |  | $ | 69,912          |  | $ | 61,233  |  |   |         |  
|                                    |    |  | 400,000   |  | $ | 0.23            |  | $ | 92,000            |  | 07/08/2004  | *  |  | 400,000        |  |   |  | 07/09/2004     |  | $ | 46,020          |  | $ | 16,692  |  |   |         |  
|                                    |    |  | 100,000   |  | $ | 0.70            |  | $ | 70,000            |  | 03/09/2006  |    |  | 100,000        |  |   |  | 03/09/2006     |  |   |                 |  | $ | 70,000  |  |   |         |  
|                                    |    |  | 100,000   |  | $ | 1.53            |  | $ | 153,000           |  | 04/04/2006  |    |  | 100,000        |  |   |  | 04/07/2006     |  |   |                 |  | $ | 153,000 |  |   |         |  
|                                    |    |  |           |  |   |                 |  |   |                   |  |             |    |  | 75,000         |  |   |  |                |  |   |                 |  |   |         |  |   |         |  
|                                    |    |  | 75,000    |  | $ | 1.07            |  | $ | 80,250            |  |             |    |  | restricted     |  |   |  | 06/08/2007     |  |   |                 |  |   |         |  | $ | 40,865  |  
|Third party                         |    |  |           |  |   |                 |  |   |                   |  |             |    |  |                |  |   |  |                |  |   |                 |  |   |         |  |   |         |  
|options:                            |    |  |           |  |   |                 |  |   |                   |  |             |    |  |                |  |   |  |                |  |   |                 |  |   |         |  |   |         |  
|Repricing of                        |    |  |           |  |   |                 |  |   |                   |  |             |    |  |                |  |   |  |                |  |   |                 |  |   |         |  |   |         |  
|warrants                            |    |  |           |  |   |                 |  |   | 69,241            |  |             |    |  |                |  |   |  |                |  |   |                 |  |   |         |  | $ | 69,241  |  
|Options                             |    |  |           |  |   |                 |  |   |                   |  |             |    |  |                |  |   |  |                |  |   |                 |  |   |         |  |   |         |  
|(1,500,000                          | )) |  |           |  |   |                 |  |   | 581,282           |  |             |    |  |                |  |   |  |                |  |   |                 |  |   |         |  | $ | 581,282 |  
|                                   
|Employees,                          |    |  |           |  |   |                 |  |   |                   |  |             |    |  |                |  |   |  |                |  |   |                 |  |   |         |  |   |         |  
|employment                          |    |  |           |  |   |                 |  |   |                   |  |             |    |  |                |  |   |  |                |  |   |                 |  |   |         |  |   |         |  
|agreements:                         |    |  |           |  |   |                 |  |   |                   |  |             |    |  |                |  |   |  |                |  |   |                 |  |   |         |  |   |         |  
|                                    |    |  | 180,000   |  | $ | 0.30            |  | $ | 54,000            |  | 12/05/2002  | *  |  | 180,000        |  |   |  | 08/26/2003     |  |   |                 |  |   |         |  |   |         |  
|                                    |    |  | 1,000,000 |  | $ | 0.32            |  | $ | 320,000           |  | 10/07/2003  | *  |  | 1,000,000      |  |   |  | 07/27/2004     |  |   |                 |  |   |         |  |   |         |  
|                                    |    |  | 330,000   |  | $ | 0.60            |  | $ | 198,000           |  | 07/12/2004  | *  |  | 2 issue dates: |  |   |  |                |  | $ | 114,162         |  | $ | 46,378  |  |   |         |  
|                                    |    |  |           |  |   |                 |  |   |                   |  |             |    |  | 60,000         |  |   |  | 11/23/2005     |  |   |                 |  |   |         |  |   |         |  
|                                   
|                                    |    |  |           |  |   |                 |  |   |                   |  |             |    |  | 270,000        |  |   |  | 08/28/2006     |  |   |                 |  |   |         |  |   |         |  
|                                    |    |  | 15,000    |  | $ | 1.30            |  | $ | 19,500            |  | 10/24/2005  |    |  | 15,000         |  |   |  | 11/23/2005     |  | $ | 19,500          |  |   |         |  |   |         |  
|                                    |    |  | 375,000   |  | $ | 0.95            |  | $ | 356,250           |  | 05/03/2006  | ** |  | 62,500         |  |   |  | 12/29/2006     |  |   |                 |  | $ | 71,751  |  | $ | (12,376 | )
|                                    |    |  | 30,000    |  | $ | 1.23            |  | $ | 36,900            |  | 06/01/2006  |    |  | 10,000         |  |   |  | 05/15/2007     |  |   |                 |  | $ | 10,781  |  | $ | 18,449  |  
|                                    |    |  |           |  |   |                 |  |   |                   |  |             |    |  | 10,000         |  |   |  | 06/08/2007     |  |   |                 |  |   |         |  |   |         |  
|                                    |    |  | 60,000    |  | $ | 1.20            |  | $ | 72,000            |  | 07/01/2006  | ** |  | 20,000         |  |   |  | 08/28/2006     |  |   |                 |  | $ | 33,334  |  | $ | (8,334  | )
|                                    |    |  | 40,000    |  | $ | 1.01            |  | $ | 40,400            |  | 10/01/2006  |    |  | 20,000         |  |   |  | 05/25/2007     |  |   |                 |  |   |         |  | $ | 40,199  |  
|                                    |    |  | 30,000    |  | $ | 0.97            |  | $ | 29,100            |  | 12/01/2006  |    |  | --             |  | - |  | --             |  |   |                 |  | $ | 790     |  | $ | 9,698   |  
|                                    |    |  | 30,000    |  | $ | 0.97            |  | $ | 29,100            |  | 12/01/2006  |    |  | --             |  | - |  | --             |  |   |                 |  |   |         |  | $ | 10,510  |  
|                                    |    |  | 30,000    |  | $ | 0.97            |  | $ | 29,100            |  | 12/01/2006  |    |  | --             |  | - |  | --             |  |   |                 |  |   |         |  | $ | 10,510  |  
|                                    |    |  | 30,000    |  | $ | 1.15            |  | $ | 34,500            |  | 02/11/2007  |    |  | --             |  | - |  | --             |  |   |                 |  |   |         |  | $ | 10,541  |  
|                                    |    |  | 325,000   |  | $ | 0.60            |  | $ | 195,000           |  | 04/09/2007  |    |  | 150,000        |  |   |  | 05/15/2007     |  |   |                 |  |   |         |  | $ | 128,104 |  
|                                    |    |  | 200,000   |  | $ | 0.60            |  | $ | 120,000           |  | 04/09/2007  |    |  | 50,000         |  |   |  | 05/15/2007     |  |   |                 |  |   |         |  | $ | 51,536  |  
|                                    |    |  | 100,000   |  | $ | 0.67            |  | $ | 67,000            |  | 05/04/2007  |    |  | 100,000        |  |   |  | 06/04/2007     |  |   |                 |  |   |         |  | $ | 67,000  |  
|                                    |    |  | 80,000    |  | $ | 0.71            |  | $ | 56,800            |  | 08/28/2007  |    |  | --             |  | - |  | --             |  |   |                 |  |   |         |  | $ | 19,103  |  
|                                    |    |  | 105,000   |  | $ | 0.71            |  | $ | 74,550            |  | 08/28/2007  |    |  | --             |  | - |  | --             |  |   |                 |  |   |         |  | $ | 8,041   |  
|                                   
|                                   
|                                   
|Directors,                          |    |  |           |  |   |                 |  |   |                   |  |             |    |  |                |  |   |  |                |  |   |                 |  |   |         |  |   |         |  
|under                               |    |  |           |  |   |                 |  |   |                   |  |             |    |  |                |  |   |  |                |  |   |                 |  |   |         |  |   |         |  
|agreements:                         |    |  |           |  |   |                 |  |   |                   |  |             |    |  |                |  |   |  |                |  |   |                 |  |   |         |  |   |         |  
|Options                             |    |  |           |  |   |                 |  |   |                   |  |             |    |  |                |  |   |  |                |  |   |                 |  |   |         |  |   |         |  
|(30,000                             | )  |  |           |  |   |                 |  | $ | 32,600            |  | 08/25/2006  |    |  |                |  |   |  | Unexercised    |  |   |                 |  | $ | 32,600  |  |   |         |  
|Options                             |    |  |           |  |   |                 |  |   |                   |  |             |    |  |                |  |   |  |                |  |   |                 |  |   |         |  |   |         |  
|(10,000                             | )  |  |           |  |   |                 |  | $ | 10,546            |  |             |    |  |                |  |   |  | Unexercised    |  |   |                 |  |   |         |  | $ | 10,546  |  
|                                    |    |  | 200,000   |  | $ | 0.80            |  | $ | 160,000           |  | 01/21/2005  |    |  | 200,000        |  |   |  | 11/23/2005     |  | $ | 77,000          |  | $ | 80,000  |  |   |         |  
|                                    |    |  | 10,000    |  | $ | 1.39            |  | $ | 13,900            |  | 11/21/2005  |    |  | 10,000         |  |   |  | 03/09/2006     |  |   |                 |  | $ | 13,900  |  |   |         |  
|                                    |    |  | 20,000    |  | $ | 1.35            |  | $ | 27,000            |  | 05/13/2006  |    |  | 20,000         |  |   |  | 09/01/2006     |  |   |                 |  | $ | 27,000  |  | $ | 17,545  |  
|                                    |    |  | 10,000    |  | $ | 1.39            |  | $ | 13,900            |  | 11/21/2005  |    |  | 10,000         |  |   |  | 03/29/2007     |  |   |                 |  |   |         |  | $ | 13,900  |  

*Shares granted in years prior to 2005 that were under multi-year agreements and expensed in year of grant and applicable succeeding years.

**Underlying contract voided and a new agreement reached due to change in employment circumstances.

Expense of share-based payment transactions is calculated by multiplying the number of shares granted by the closing price of our stock on the measurement date related to the particular transaction.

68

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SUMMARY OF EQUITY COMPENSATION STOCK-OPTION PLANS

TOTAL SHARES
     
     ISSUED
     
     AVAILABLEPLAN NAME2002 Compensatory Stock Option Plan
     
     3,000,000
     
     1,045,000
     
     1,955,0002003 Employee Stock Compensation Plan
     
     5,000,000
     
     4,987,500
     
     12,500


The following table shows the activity of the outstanding warrants during the years ended December 31, 2007 and 2006:

|                           |  |   |          |  |              |  |                   |  |          |   |  |           |  |            |  |         
|-------------------------- |  | - | -------- |  | ------------ |  | ----------------- |  | -------- | - |  | --------- |  | ---------- |  | --------
|Warrant holder             |  |   | Exercise |  | Shares       |  | Repriced          |  | Exercise |   |  |           |  | Expiration
|                           |  |   | Price    |  | underlying,  |  | December 24, 2007 |  | date     |   |  | Exercised |  | Shares     |  |         
|                           |  |   |          |  | beginning of |  |                   |  |          |   |  |           |  | issued     |  |         
|                           |  |   |          |  | year 2006    |  |                   |  |          |   |  |           |  |            |  |         
|                           |  |   |          |  |              |  |                   |  |          |   |  |           |  |            |  |         
|Barron Partners            |  | $ | 0.68     |  | 7,200,000    |  |                   |  | 08/03/05 |   |  | 7,200,000 |  | 7,200,000  |  | -----   
|                           |  | $ | 1.36     |  | 7,200,000    |  |                   |  |          |   |  |           |  |            |  | 05/30/09
|                          
|J G Capital                |  | $ | 0.34     |  | 720,000      |  |                   |  | 08/26/05 | * |  | 501,000   |  | 399,000    |  | 05/30/09
|                           |  |   |          |  |              |  |                   |  | 05/08/06 | * |  | 219,000   |  | 219,000    |  | -----   
|                           |  | $ | 0.68     |  | 540,000      |  |                   |  | 08/08/06 |   |  | 240,000   |  | 125,124    |  | 05/30/09
|                           |  | $ | 1.36     |  | 540,000      |  |                   |  |          |   |  |           |  |            |  | 05/30/09
|                          
|Alpha Capital              |  | $ | 1.00     |  | 625,000      |  | 625,000           |  |          |   |  |           |  |            |  | ----    
|                           |  | $ | 1.36     |  | 625,000      |  | 625,000           |  |          |   |  |           |  |            |  | ----    
|                           |  | $ | 0.45     |  | 625,000      |  |                   |  |          |   |  |           |  |            |  | 09/02/09
|                           |  | $ | .045     |  | 625,000      |  |                   |  |          |   |  |           |  |            |  | 09/02/09
|                          
|Greenwich                  |  |   |          |  |              |  |                   |  |          |   |  |           |  |            |  |         
|Growth                     |  | $ | 1.00     |  | 96,154       |  |                   |  | 03/30/06 |   |  | 96,154    |  | 96,154     |  | 09/02/09
|                           |  | $ | 1.36     |  | 96,154       |  | 96,154            |  |          |   |  |           |  |            |  | ----    
|                           |  | $ | 0.45     |  | 96,154       |  |                   |  |          |   |  |           |  |            |  | 09/02/09
|                          
|Grushki &                  |  |   |          |  |              |  |                   |  |          |   |  |           |  |            |  |         
|Mittman, PC                |  | $ | 0.52     |  | 31,731       |  |                   |  | 09/14/05 | * |  | 31,731    |  | 22,812     |  |         
|                           |  | $ | 1.00     |  | 15,865       |  | 15,865            |  |          |   |  |           |  |            |  | ----    
|                           |  | $ | 1.36     |  | 15,865       |  | 15,865            |  |          |   |  |           |  |            |  | ----    
|                           |  | $ | 0.45     |  | 15,865       |  |                   |  |          |   |  |           |  |            |  | 09/02/09
|                           |  | $ | 0.45     |  | 15,865       |  |                   |  |          |   |  |           |  |            |  | 09/02/09
|                          
|Heza Holding               |  | $ | 0.52     |  | 31,731       |  |                   |  | 12/27/05 | * |  | 31,731    |  | 21,017     |  |         
|                           |  | $ | 1.00     |  | 15,865       |  | 15,865            |  |          |   |  |           |  |            |  | ----    
|                           |  | $ | 1.36     |  | 15,865       |  | 15,865            |  |          |   |  |           |  |            |  | ----    
|                           |  | $ | 0.45     |  | 15,865       |  |                   |  |          |   |  |           |  |            |  | 09/02/09
|                           |  | $ | 0.45     |  | 15,865       |  |                   |  |          |   |  |           |  |            |  | 09/02/09
|                          
|J G Capital                |  | $ | 0.52     |  | 95,192       |  |                   |  | 01/23/07 | * |  | 95,192    |  | 48,494     |  | 09/02/09
|                           |  | $ | 1.00     |  | 47,597       |  | 47,597            |  |          |   |  |           |  |            |  | ----    
|                           |  | $ | 1.36     |  | 47,597       |  | 47,597            |  |          |   |  |           |  |            |  | ----    
|                           |  | $ | 0.45     |  | 47,597       |  |                   |  |          |   |  |           |  |            |  | 09/02/09
|                           |  | $ | 0.45     |  | 47,597       |  |                   |  |          |   |  |           |  |            |  | 09/02/09
|                          
|Stonestreet                |  | $ | 1.00     |  | 192,308      |  | 192,308           |  |          |   |  |           |  |            |  | ----    
|                           |  | $ | 1.36     |  | 192,308      |  | 192,308           |  |          |   |  |           |  |            |  | ----    
|                           |  | $ | 0.45     |  | 192,308      |  |                   |  |          |   |  |           |  |            |  | 09/02/09
|                           |  | $ | 0.45     |  | 192,308      |  |                   |  |          |   |  |           |  |            |  | 09/02/09
|                          
|Whalehaven                 |  | $ | 1.00     |  | 144,231      |  | 144,231           |  |          |   |  |           |  |            |  | ----    
|                           |  | $ | 1.36     |  | 144,231      |  | 144,231           |  |          |   |  |           |  |            |  | ----    
|                           |  | $ | 0.45     |  | 144,231      |  |                   |  |          |   |  |           |  |            |  | 09/02/09
|                           |  | $ | 0.45     |  | 144,231      |  |                   |  |          |   |  |           |  |            |  | 09/02/09
|                          
|Victory Park               |  | $ | 0.45     |  | 1,500,000    |  |                   |  |          |   |  |           |  |            |  | 12/19/12
|*Denotes cashless exercise |  |   |          |  |              |  |                   |  |          |   | 

69

---

The following table shows options granted during the years ended December 31, 2007 and 2006:

Option date
     
     Underlying
     
     Option price
     
     Expensed under:
     
     Per share
     
     Amount expensedShares
     
     
     
     
     
     expense3/09/2007
     
     10,000
     
     $1.05
     
     Black Scholes
     
     $1.05
     
     $10,5468/25/2006
     
     30,000
     
     $1.03
     
     Black Scholes
     
     $1.09
     
     $32,600


Stock-based Compensation Disclosure

Stock issued under plans to employees was issued at the value of the stock at the measurement date. All options issued were immediately exercisable. Until 2004, options issued were immediately exercised. Those options issued to employees that were not immediately exercised remained outstanding at December 31, 2007 and are summarized below:

2007Weighted AverageExercise PriceOptions outstanding at
     
     930,000
     
     $0.198
     
     Exercisable on grant datebeginning of yearGranted during year
     
     10,000
     
     $1.05
     
     Exercisable on grant dateExercised year
     
     NoneForfeited year
     
     NoneOutstanding at
     
     940,000
     
     $0.207
     
     Exercisable on grant date12/31/2007Options exercisable at
     
     940,000
     
     $0.207year endWeighted average fair
     
     $1.05value of options grantedduring the year


The aggregate remaining contractual lives in years for the 900,000, 30,000 and 10,000 options outstanding and exercisable on December 31, 2007 was 2.47 and 4.85, respectively. Aggregate intrinsic value represents total pretax intrinsic value (the difference between Globals closing stock price on December 31, 2006 and the exercise price, multiplied by the number of in-the-money options) that would have been received by the option holders had all option holders executed their options on December 31, 2007. This amount changes based on the fair market value of Globals stock. The total intrinsic value of options outstanding as of December 31, 2007 was $783,300. The total intrinsic value of options exercisable on December 31, 2007 was $783,300. There were no options exercised during the year ended December 31, 2007. The Company issues new shares of common stock upon the exercise of stock options.

The 900,000 options issued in 2004 were issued at $0.06 below the share price on the measurement date. Expense in the amount of $54,000 was included in selling, general and administrative expenses for 2004. Because the options were immediately available the intrinsic value and the fair value of the options is calculated at the same $.23 per share.

70

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|                         |  |         |  |                  |  |                          
|------------------------ |  | ------- |  | ---------------- |  | -------------------------
|                         |  | 2006   
|                         |  |         |  | Weighted Average |  |                          
|                         |  |         |  | Exercise Price   |  |                          
|Options outstanding at   |  | 900,000 |  | $0.17            |  | Exercisable on grant date
|beginning of year        |  |         |  |                  |  |                          
|                         |  |         |  |                  |  |                          
|Granted during year      |  | 30,000  |  | $1.03            |  | Exercisable on grant date
|                         |  |         |  |                  |  |                          
|Exercised during year    |  | None    |  |                  |  |                          
|                         |  |         |  |                  |  |                          
|Forfeited during year    |  | None    |  |                  |  |                          
|                         |  |         |  |                  |  |                          
|Outstanding at           |  | 930,000 |  | $0.198           |  | Exercisable on grant date
|12/31/2006               |  |         |  |                  |  |                          
|Options exercisable at   |  | 930,000 |  | $0.198           |  |                          
|year-end                 |  |         |  |                  |  |                          
|                         |  |         |  |                  |  |                          
|Weighted average fair    |  | $1.09   |  |                  |  |                          
|value of options granted |  |         |  |                  |  |                          
|during the year          |  |         |  |                  |  |                          

11.    FAIR VALUE OF FINANCIAL INSTRUMENTS

The carrying values of cash and cash equivalents, accounts receivable, notes receivable and accounts payable and notes payable approximate fair values due to the short-term maturities of these instruments. The fair value of notes payable approximates the carrying value because of the current market value interest rates applied to those obligations. The fair value of capital leases approximates the carrying value of these instruments because the terms are similar to those in the marketplace under which they could be replaced.

12.    NOTES PAYABLE

On December 20, 2007, Global and its subsidiaries HAT, World Jet and Hamilton Aerospace S.A. de C.V. ("HATMEX") (collectively the "Companies") entered into and closed on three non-convertible secured debenture financing agreements with two accredited institutional investors ("Holders") in the total amount of $10 million (collectively the "Debentures"). These Debentures consist of (i) one non-convertible senior secured debenture in the amount of $5 million; (ii) one non-convertible senior secured debenture in the amount of $3 million; and (iii) one non-convertible junior secured debenture in the amount of $2 million. The Debentures accrue interest at the rate of 15% per annum which is payable quarterly in arrears beginning April 1, 2008. The Debentures also provide for a cash flow recapture to the Holders equal to 60% of any proceeds related to the sale of Global's aircraft inventory. The Debentures mature on December 19, 2008.

In connection with the Debentures, the Companies and Holders executed a Pledge and Security Agreement, Aircraft Security Agreements, Securities Purchase Agreement, Registration Rights Agreement, and a Post Closing Agreement. Additionally, Global issued a Warrant (as defined and detailed below) to one Holder as an inducement to purchase a Debenture. Mr. John B. Sawyer, President of the Companies, also executed a personal guaranty for $2 million of the Debentures ("Personal Guaranty"). These transaction documents are attached hereto as Exhibits to this Form 8-K. Mr. Ian Herman, CEO of the Companies, executed an identical personal guaranty to Mr. Sawyer for $1 million of the Personal Guaranty.

Pursuant to the Pledge and Security Agreement and Aircraft Security Agreements, the Debentures are secured by (a) a first lien on all the current and future assets of the Companies including any owned aircraft; (b) the equity interests currently held by Global in HAT, WJ and HATMEX; and (c) the 40% membership interest of Global in Global Aircraft Leasing Partners, LLC. However, in the event of default, foreclosure of the foregoing equity and membership interests held by Global can only be enforced if the foreclosure on all other assets of the Companies is insufficient to satisfy repayment of the Debentures.

Similar to the foreclosure conditions set forth in the preceding paragraph, enforcement of the Personal Guaranty cannot occur until and unless the foreclosure on all other assets of the Companies is insufficient to satisfy repayment of the Debentures.

As an inducement for Holder Victory Park Master Fund, Ltd. ("Victory Park") to purchase a Debenture, Global issued Victory Park a 5-year warrant exercisable into 1,500,000 shares of Global common stock ("Common Stock") at an exercise price of $0.45 per share ("Warrant"). However, if Victory Park should choose to exercise the Warrant then it would receive a reduced number of Common Stock shares based upon the cashless exercise formula contained therein.

The Warrant also contains a contingent obligation which shall be determined pursuant to a one-time value test on December 20, 2008 ("Test Date"). In the event that the difference between the Common Stock VWAP (for the 20 trading days prior to such Test Date) and the exercise price multiplied by the number of Warrant shares is not at least equal to $750,000 ("Target Value"), then Global will be obligated to issue an additional warrant to Victory Park. If Global is obligated to issue an additional warrant (such warrant will contain identical terms and provisions as the Warrant set forth above), that warrant shall be exercisable into that number of Common Stock shares that would cause the

71

---

additional warrant and the Warrant combined to equal the Target Value, but in no event shall the additional warrant be exercisable into more than 500,000 warrant shares.

Under the Registration Rights Agreement, Victory Park cannot request Global to register the underlying warrant shares for at least six months after the closing date. After June 20, 2008, Victory Park can request that Global commence the process to register the warrant shares. If Global is required to register the warrant shares subsequent to June 20, 2008, Global will be obligated to file a registration statement within 45 days of such request and cause the registration statement to become effective within 270 days of filing. In the event Global is asked to file a registration statement and fails to comply with the filing and effectiveness deadlines as set forth above, Global will be obligated to pay Victory Park liquidated damages in the amount of 2% of the total amount of the Debentures each and every month until Global satisfies the filing and/or effectiveness requirements.

The Post Closing Agreement allows the Companies to complete certain conditions of closing within certain time frames subsequent to closing and subjects the Companies to an event of default should the Companies fail to meet such conditions within the time frames set forth in the Post Closing Agreement.

Upon the occurrence of certain events of default as defined in the Debentures and the Post Closing Agreement, including events of default under the transaction documents related to the Debentures, the full principal amount of the Debentures, together with interest and other amounts owing become immediately due and payable. Moreover, an event of default also subjects the assets of the Companies and the equity and membership interests as well as the Personal Guaranty to foreclosure.

Proceeds of the Debentures will be utilized to satisfy and terminate the Companies' existing credit facility ($5,052,336) and other existing indebtedness as well as to pay down certain trade accounts and fund working capital.

Pursuant to the closing of this transaction, the Companies incurred a closing fee equal to 3% of the Debentures and legal and accounting costs.

M&I Marshall & Ilsley Bank has an outstanding Letter of Credit for $128,000 to TAA as part of the lease agreement for the HAT facility. This Letter of Credit is secured by a certificate of deposit in the amount of $128,000.

13.    RELATED PARTY TRANSACTIONS

BCI Aircraft Leasing, Inc.

BCI Aircraft Leasing, Inc., Globals former partner in Jetglobal, see Note 5, accounted for 17.4% of Company revenue during 2007 and 16.6% during 2006. The account receivable from BCI at December 31, 2007 was $3,895,149 and at December 31, 2006 was $1,827,482.

The Company had no revenue from Jetglobal in 2007. Jetglobal, LLC accounted for 7.2% of the Companys revenue in 2006. The total amount due to the Company from Jetglobal was $1,093,316 at December 31, 2006. Jetglobal had no accounts receivable balance at December 31, 2007.

New customer GALP accounted for 46.5% of the Companys revenue in 2007, which included a $7,850,000 aircraft purchase, representing about 32% of revenues.

14.    CONTRACTS IN PROGRESS

At December 31, 2007 and December 31, 2006, costs and estimated earnings in excess of billings and billings in excess of costs and estimated earnings on uncompleted contracts consist of the following:

2007
     
     
     
     2006Costs incurred on uncompleted
     
     $
     1,670,556
     
     
     $
     1,486,387contractsProfit earned to date
     
     
     1,630,873
     
     
     
     521,378$
     3,301,329
     
     
     $
     2,007,765Less: Billings to date
     
     
     (4,124,191
     )
     
     
     (2,314,710
     )$
     (822,762
     )
     
     $
     (306,945
     )


Included in the accompanying balance sheet at December 31, 2007 and 2006 under the following caption:

72

---

Billings in excess of costs and estimated earnings on uncompleted contracts

2007
     
     
     
     2006Billings in excess from above
     
     $
     (822,762
     )
     
     $
     (306,945
     )Time and material earnings unbilled
     
     
     
     
     
     
     82,899Net
     
     $
     (822,762
     )
     
     $
     (224,046
     )


Billings in excess are the result of amounts due from customers under contractual terms, which can be, in some cases, in advance of actual work performed.

15.    TRADE ACCOUNTS RECEIVABLE

Trade accounts receivable represent amounts billed but uncollected on both completed and in-progress aircraft repair and maintenance contracts as well as amounts billed but uncollected on parts shipped to customers.

Accounts receivable are stated at the amount management expects to collect from outstanding balances. Management provides for probable uncollectible amounts through a charge to earnings and a credit to a valuation allowance based on its assessment of the current status of individual accounts. The allowance is estimated as a percentage of accounts receivable based on a review of accounts receivable outstanding and the Company's prior history of uncollectible accounts receivable. Balances that are still outstanding after management has used reasonable collection efforts are written off through a charge to the valuation allowance and a credit to trade accounts receivable. Changes in the valuation allowance were material to the financial statements in 2007 and 2006. During 2007, the Company had bad debt expense of $3,610,776. During 2006, the Company had bad debt expense of $338,000. The Company believes its allowance at December 31,

 2007 is adequate based upon review of our outstanding accounts receivable at December 31, 2007.

As of December 31, 2007 and December 31, 2006, trade accounts receivable consist of the following:

2007
     
     
     
     2006Contracts in progress
     
     $
     2,393,224
     
     
     $
     1,158,998Completed contracts
     
     $
     7,789,974
     
     
     $
     7,185,118$
     10,183,198
     
     
     $
     8,344,116Less: allowance for doubtful accounts
     
     
     (2,771,078
     )
     
     
     (473,317
     )$
     7,412,120
     
     
     $
     7,870,799


The amounts charged to the allowance for doubtful accounts are as follows for the years ended December 31:

Balance at the
     
     
     Charged to
     
     
     
     
     
     
     Balance at theYear
     
     
     Beginning of Year
     
     
     Expense
     
     
     Deductions
     
     
     
     End of Year2005
     
     $
     53,149
     
     $
     473,208
     
     $
     (233,850
     )
     
     $
     292,5072006
     
     $
     292,507
     
     $
     337,508
     
     $
     (156,697
     )
     
     $
     473,3182007
     
     $
     473,318
     
     $
     3,610,776
     
     $
     (1,313,016
     )
     
     $
     2,771,078Deductions represent recovery of previously reserved amounts.


73

---

16.    INCOME TAXES

The following table summarized components of income tax expense for the years ended December 31, 2007, 2006 and 2005:

2007
     
     
     
     2006
     
     
     
     2005Current provision/(benefit)
     
     $
     (476,480
     )
     
     $
     211,382
     
     
     $
     372,578Deferred provision/(benefit)
     
     
     (1,537,786
     )
     
     
     175,118
     
     
     
     (6,400
     )$
     (2,014,266
     )
     
     $
     386,500
     
     
     $
     366,178




|
|

2007
     
     
     
     2006
     
     
     2005Federal income tax expense (benefit) at statutory rate (34%)
     
     $
     (1,736,804
     )
     
     $
     412,355
     
     $
     1,186,442State income tax expense (benefit) net of federal tax effect
     
     
     (145,734
     )
     
     
     84,654
     
     
     174,476Benefit of net operating loss carryover
     
     
     
     
     
     
     
     
     
     (951,200
     )Other
     
     
     (180,074
     )
     
     
     (57,000
     )Permanent differences
     
     
     48,345
     
     
     
     31,145
     
     
     (43,540
     )Tax credits
     
     
     
     
     
     
     (84,654
     )Net income tax expense
     
     $
     (2,014,266
     )
     
     $
     386,500
     
     $
     366,178


74

---

The components of deferred taxes at December 31, 2007 and 2006 in the accompanying balance sheet is summarized below:

2007
     
     
     2006Deferred tax assetsAllowance for bad debts
     
     $
     1,127,773
     
     $
     186,802Amortization of intangibles
     
     
     155,149
     
     
     164,069Accrued vacation and compensation
     
     
     33,113
     
     
     85,413Inventory reserve
     
     
     51,274Fixed asset basis
     
     
     120,748Stock compensation
     
     
     215,804Other
     
     
     55,749
     
     
     27,293$
     1,759,666
     
     $
     463,577Deferred tax liabilitiesDepreciation
     
     
     
     
     
     139,911Investment in affiliate
     
     
     
     
     
     368,185Deferred tax liabilities
     
     
     0
     
     
     508,096Valuation allowance
     
     
     0
     
     
     0Deferred tax assets (liabilities), net
     
     $
     1,759,666
     
     $
     (44,519
     )




During 2007, the Company was notified of an Internal Revenue Service, ("IRS"), examination for the 2005 tax year.

The income tax payable reflects liabilities related to the 2005 and 2006 tax years including preliminary adjustments resulting from the 2005 IRS audit. The income tax payable also includes the tax benefit relatd to the 2-year carryback of th 2007 tax net operating loss, ("NOL"). The Company expects to realize the benefit of the 2007 NOL carryback in conjuncation with the settlement of adjustments resulting from the IRS audit. The Company's current taxes payable also includes $81,208 and $63,192 of interst related to the 2005 and 2006 tax years respectively, and includes amounts resulting from the preliminary adjustments related to the 2005 audit.

75

---

17.    CONCENTRATIONS

**Revenues**

The Companys top four customers accounted for 80.5% of sales during the year ended December 31, 2007. The Companys top four customers accounted for 52.4% of sales during the year ended December 31, 2006 and 37.6% during the same period in 2005. Three customers accounted for 63.8% of the Companys accounts receivable at December 31, 2006. Five customers accounted for 45% of the Companys accounts receivable at December 31, 2005. The broadening of our customer base will spread the risk associated with a potential failure of a significant customer. Efforts are continually being made to broaden our customer base. While the relative significance of customers varies period to period, the loss of, or significant curtailments of purchase of our services by, one or more or our significant customers at any time could adversely affect our revenue and cash flow. The top four customers reference above for 2007, 2006 and

2005 are listed in the table below:

|                    |  |            |  |  |               |  |            |  |  |               |  |            
|------------------- |  | ---------- |  |  | ------------- |  | ---------- |  |  | ------------- |  | -----------
|2007-Top Four       |  | 2007- % Of |  |  | 2006-Top Four |  | 2006- % Of |  |  | 2005-Top Four |  | 2005 - % Of
|Customers           |  | Revenues   |  |  | Customers     |  | Revenues   |  |  | Customers     |  | Revenues   
|                    |  |            |  |  |               |  |            |  |  |               |  |            
|Customer I          |  | 46.5       |  |  | Customer E    |  | 18.4       |  |  | Customer A    |  | 16.7       
|Customer F          |  | 17.4       |  |  | Customer F    |  | 20.3       |  |  | Customer B    |  | 8.3        
|Customer E          |  | 13.9       |  |  | Customer G    |  | 7.2        |  |  | Customer C    |  | 6.6        
|Customer J          |  | 3.6        |  |  | Customer H    |  | 6.5        |  |  | Customer D    |  | 6.0        
|Top Four-2007 Total |  | 80.5       |  |  | Top Four-2006 |  | 52.4       |  |  | Top Four-2005 |  | 37.6       
|%                   |  |            |  |  | Total %       |  |            |  |  | Total %       |  |            

Cash

We are potentially subjected to concentration of credit risks through our cash and cash equivalents and accounts receivable. Cash and cash equivalents are deposited or managed by major financial institutions and at times are in excess of FDIC insurance limits. At December 31, 2007 and 2006 cash and cash equivalents held in excess of FDIC insurance limits were approximately $900,000 and $0, respectively.

18.    SUBSEQUENT EVENTS

A settlement agreement was reached in HAT's suit against Admiral Merchants Motor Freight, Inc. in February 2008. On April 9, 2008, the Company received $149,258, representing payment in full, less legal fees.

During February 2008, HAT reached a settlement agreement related to the complaint filed by Petro Energy Corporation in in June of 2007. HAT paid $179,278 on March 28, 2008 for full and final settlement of the fuel claim and the $17.5 million claim for fuel services provided to Avolar was withdrawn and dismissed with prejudice.

76

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Report of Independent Accountants

To the Members 
Jetglobal, LLC:

We have audited the accompanying balance sheets of Jetglobal, LLC (the Company) as of December 31, 2006 and 2005, and the related statements of operations and members equity and cash flows for the year ended December 31, 2006 and for the period from inception (August 26, 2005) to December 31, 2005. These financial statements are the responsibility of the Companys management. Our responsibility is to express an opinion on these financial statements based on our audits.

We conducted our audits in accordance with accordance with generally accepted auditing standards of the United States of America.. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. We were not engaged to perform an audit of the Companys internal control over financial reporting. Our audit included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Companys internal control over financial reporting. Accordingly, we express no such opinion. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant e

stimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.

In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position Jetglobal, LLC as of December 31, 2006 and 2005, and the results of its operations and its cash flows for the year ended December 31, 2006 and for the period from inception (August 26, 2005) to December 31, 2005 in conformity with accounting principles generally accepted in the United States of America.

/s/ Moss Adams LLP 
April 17, 2007 
Scottsdale, Arizona

77

---

|                                        |   |            |  |   |           
|--------------------------------------- | - | ---------- |  | - | ----------
|JETGLOBAL, LLC                         
|BALANCE SHEET                          
|December 31, 2006 and December 31, 2005
|                                       
|                                       
|ASSETS                                 
|                                        |   | 2006       |  |   | 2005      
|CURRENT ASSETS                          |   |            |  |   |           
|                                       
|Accounts receivable                     | $ | 830,445    |  | $ |           
|Inventory                               |   | 16,234,615 |  |   | 9,578,842 
|Deposits                                |   | 350,000    |  |   | 5,488,468 
|Prepaid insurance                       |   | 103,950    |  |   |           
|                                       
|TOTAL CURRENT ASSETS                    | $ | 17,519,010 |  | $ | 15,067,310
|                                       
|TOTAL ASSETS                            | $ | 17,519,010 |  | $ | 15,067,310

The accompanying notes are an integral part of these financial statements.

78

---

|                                                                           |   |            |   |  |   |            |  
|-------------------------------------------------------------------------- | - | ---------- | - |  | - | ---------- | -
|JETGLOBAL, LLC                                                            
|BALANCE SHEET                                                             
|December 31, 2006 and December 31, 2005                                    |   |            |   |  |  
|                                                                          
|                                                                          
|LIABILITIES AND MEMBERS' EQUITY                                            |   |            |   |  |   |            |  
|                                                                           |   | 2006       |   |  |   | 2005       |  
|                                                                           |   |            |   |  |   |            |  
|CURRENT LIABILITIES                                                        |   |            |   |  |   |            |  
|Notes payable  short term                                                 | $ | 1,427,189  |   |  | $ |            |  
|Accounts payable  trade                                                   |   | 800,434    |   |  |   | 76,055     |  
|Due to related parties                                                     |   | 1,091,316  |   |  |   |            |  
|Commitments and contingencies                                              |   |            |   |  |   |            |  
|                                                                          
|TOTAL CURRENT LIABILITIES                                                  | $ | 3,318,939  | $ |  | $ | 76,055     |  
|                                                                          
|TOTAL LIABILITIES                                                          | $ | 3,318,939  | $ |  | $ | 76,055     |  
|                                                                          
|                                                                          
|MEMBERS EQUITY                                                            |   |            |   |  |   |            |  
|BCI Aircraft Leasing                                                       |   | 3,596,247  |   |  |   | 11,156,444 |  
|Global Aircraft Solutions                                                  |   | 5,100,918  |   |  |   | 4,361,056  |  
|BCI Aircraft Leasing Retained Earnings (Loss)                              |   | 3,852,034  |   |  |   | (368,372   | )
|Global Aircraft Solutions Retained Earnings (Loss)                         |   | 1,650,872  |   |  |   | (157,873   | )
|                                                                          
|                                                                          
|TOTAL MEMBERS EQUITY                                                      | $ | 14,200,071 |   |  | $ | 14,991,255 |  
|                                                                          
|TOTAL LIABILITIES AND MEMBERS EQUITY                                      | $ | 17,519,010 | $ |  | $ | 15,067,310 |  
|The accompanying notes are an integral part of these financial statements. |   |            |   |  |  

79

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|JETGLOBAL, LLCSTATEMENT OF OPERATIONS
|-------------------------------------

For the Years ended December 31, 2006 and the Period from Inception (August 26, 2005) to December 31, 2005

|                                            |  |   |            |   |  |   |                   |  
|------------------------------------------- |  | - | ---------- | - |  | - | ----------------- | -
|                                            |  |   |            |   |  |   | From Inception    |  
|                                            |  |   |            |   |  |   | (August 26, 2005) |  
|                                            |  |   |            |   |  |   | To                |  
|                                            |  |   |            |   |  |   | December 31,      |  
|                                            |  |   | 2006       |   |  |   | 2005              |  
|                                           
|Revenue                                     |  |   |            |   |  |   |                   |  
|Net aircraft sales                          |  | $ | 12,429,860 |   |  | $ |                   |  
|Net aircraft leases                         |  |   | 1,893,232  |   |  |   |                   |  
|Total revenue                               |  | $ | 14,323,092 |   |  |   |                   |  
|                                           
|Cost of sales                               |  |   | (7,150,356 | ) |  |   |                   |  
|                                           
|Gross profit                                |  |   | 7,172,736  |   |  |   |                   |  
|                                           
|Selling, general and administrative expense |  |   | (1,012,979 | ) |  |   | (526,245          | )
|                                           
|Gain /(loss) from operations                |  |   | 6,159,757  |   |  |   |                   |  
|                                           
|Other income (expense):                     |  |   |            |   |  |   |                   |  
|Interest expense                            |  |   | (130,606   | ) |  |   |                   |  
|                                           
|Net income/(loss)                           |  | $ | 6,029,151  |   |  | $ | (526,245          | )

The accompanying notes are an integral part of these financial statements.

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|JETGLOBAL, LLC
|--------------

STATEMENT OF MEMBERS EQUITY

For the year ended December 31, 2006 and the Period from Inception (August 26, 2005) To December 31, 2005

|                                   |  |   |             |   |  |   |           |   |  |   |             |  
|---------------------------------- |  | - | ----------- | - |  | - | --------- | - |  | - | ----------- | -
|                                   |  |   | BCI         |   |  |   | GLOBAL    |   |  |   | TOTAL       |  
|                                   |  |   |             |   |  |   |           |   |  |   |             |  
|Members equity August 26, 2005    |  |   | 0           |   |  |   | 0         |   |  |   | 0           |  
|Capital contributions              |  | $ | 15,423,750  |   |  | $ | 4,576,440 |   |  | $ | 20,000,190  |  
|Distributions                      |  |   | (3,621,152  | ) |  |   | (861,538  | ) |  |   | (4,482,690  | )
|Other payments                     |  |   | (646,154    | ) |  |   | 646,154   |   |  |   |             |  
|Net loss                           |  |   | (368,372    | ) |  |   | (157,873  | ) |  |   | (526,245    | )
|                                  
|Members Equity, December 31, 2005 |  | $ | 10,788,072  |   |  | $ | 4,203,183 |   |  | $ | 14,991,255  |  
|                                  
|Capital contributions              |  |   | 4,287,451   |   |  |   | 2,258,612 |   |  |   | 6,546,063   |  
|Distributions                      |  |   | (11,066,398 | ) |  |   | (300,000  | ) |  |   | (11,366,398 | )
|Net profit                         |  |   | 4,220,406   |   |  |   | 1,808,745 |   |  |   | 6,029,151   |  
|                                  
|Members Equity, December 31, 2006 |  | $ | 7,448,281   |   |  | $ | 6,751,790 |   |  | $ | 14,200,071  |  

The accompanying notes are an integral part of these financial statements.

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|JETGLOBAL, LLCConsolidated Statement of Cash Flows
|--------------------------------------------------

For the Years ended December 31, 2006 and the Period from Inception (August 26, 2005) to 
December 31, 2005

|                                                                                                                            |   |             |   |   |                      |  
|--------------------------------------------------------------------------------------------------------------------------- | - | ----------- | - | - | -------------------- | -
|                                                                                                                            |   |             |   |   | From Inception       |  
|                                                                                                                            |   |             |   |   | (August 26, 2005) to |  
|                                                                                                                            |   | 2006        |   |   | December 31, 2005    |  
|                                                                                                                            |   |             |   |   |                      |  
|Cash flows from operating activities:                                                                                       |   |             |   |   |                      |  
|Net income (loss)                                                                                                           | $ | 6,029,151   |   | $ | (526,245             | )
|                                                                                                                           
|Adjustments to reconcile net profit to net cash                                                                             |   | 0           |   |   | 0                    |  
|provided (used) by operating activities:                                                                                    |   |             |   |   |                      |  
|                                                                                                                           
|                                                                                                                           
|Changes in Assets and Liabilities:                                                                                          |   |             |   |   |                      |  
|Accounts receivable                                                                                                         |   | (830,445    | ) |   |                      |  
|Prepaid expenses                                                                                                            |   | (103,950    | ) |   |                      |  
|Inventory                                                                                                                   |   | (2,028,843  | ) |   | (9,578,842           | )
|Deposits                                                                                                                    |   | (350,000    | ) |   | (5,488,468           | )
|Accounts payable-trade                                                                                                      |   | 1,815,695   |   |   | 76,055               |  
|                                                                                                                           
|Net cash provided by/(used for) operating activities                                                                        |   | 4,531,608   |   |   | (15,517,500          | )
|                                                                                                                           
|Cash flows from investing activities:                                                                                       |   |             |   |   |                      |  
|Net cash used for investing activities                                                                                      |   | 0           |   |   | 0                    |  
|                                                                                                                           
|Cash flows from financing activities:                                                                                       |   |             |   |   |                      |  
|Cash in by partners                                                                                                         |   | 4,546,064   |   |   | 20,000,190           |  
|Cash out by partners                                                                                                        |   | (10,504,861 | ) |   | (175,000             | )
|Funds received on notes payable                                                                                             |   | 4,257,000   |   |   |                      |  
|Payments made on notes payable                                                                                              |   | (2,829,811  | ) |   |                      |  
|                                                                                                                           
|Net cash provided by (used for) financing activities                                                                        |   | (4,531,608  | ) |   | 19,825,190           |  
|                                                                                                                           
|Net increase in cash and cash equivalents                                                                                   |   | 0           |   |   | 0                    |  
|                                                                                                                           
|Cash and cash equivalents at beginning of period                                                                            |   | 0           |   |   | 0                    |  
|                                                                                                                           
|Cash and cash equivalents at end of period                                                                                  | $ | 0           |   | $ | 0                    |  
|                                                                                                                           
|                                                                                                                           
|Supplemental schedule of non-cash financing activities                                                                      |   |             |   |   |                      |  
|Aircraft inventory distributed to members                                                                                   | $ | 861,538     |   | $ | 4,307,690            |  
|                                                                                                                           
|                                                                                                                           
|                                                                                                                           
|Interest paid for the year ended December 31, 2006 was $130,606. No interest was paid for the year ended December 31, 2005. |  

The accompanying notes are an integral part of these condensed consolidated financial statements.

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|JETGLOBAL, LLC
NOTES TO FINANCIAL STATEMENTS
December 31, 2006 and 2005
|-----------------------------------------------------------------------

1.    BASIS OF PRESENTATION

Jetglobal, LLC (the Company) was formed on August 26, 2005 to operate as an aircraft trading and leasing company. The Companys members are BCI Aircraft Leasing Company, (BCI), which owns 70% and Global Aircraft Solutions, Inc., (Global), which owns 30%. The Companys customers are international second and third tier airlines and leasing companies, who are located and operate worldwide. As a limited liability company, the liability of any individual member for the obligations of the Company is limited to the extent of capital contributions to the Company by the individual member

The Company operated in a single business segment, aircraft trading. However, as discussed in Note 5, 12 aircraft acquired remained under lease arrangements with Delta Airlines. As a result, the Company had residual lease income from those lease arrangements. As the leases expired during 2006 the lease income ceased. The Company does not intend to enter into other leasing activity.

Subsequent to December 31, 2006, the two members agreed to wind up the operations of the Company in 2007. The members are negotiating a settlement to distribute all of the assets of the Company to the two members. The distribution of the net assets to the two members is intended to be based upon the carrying value of those net assets.

2.    SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Cash and Cash Equivalents

We consider cash and investments in securities with maturities at the date of purchase of three months or less to be cash and cash equivalents.

Use of Estimates

The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.

Trade Accounts Receivable

Trade accounts receivable represent amounts billed but uncollected on the sale of aircraft.

Accounts receivable are stated at the amount management expects to collect from outstanding balances. Management provides for probable uncollectible amounts through a charge to earnings and a credit to a valuation allowance based on its assessment of the current status of individual accounts. The allowance is estimated as a percentage of accounts receivable based on a review of accounts receivable outstanding and the Company's prior history of uncollectible accounts receivable. Balances that are still outstanding after management has used reasonable collection efforts are written off through a charge to the valuation allowance and a credit to trade accounts receivable.

Inventory

Inventories are stated at the lower of cost or market. Inventories include used aircraft purchased for resale that are available for sale as well as aircraft that have been leased under a short-term operating lease contract.

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The Company reviews the market value of inventories whenever events and circumstances indicate that the carrying value of inventories may not be recoverable from the estimated future sales price less cost of disposal and normal gross profit. In cases where the market values are less than the carrying value, a write down is recognized equal to an amount by which the carrying value exceeds the market value of inventories.

Revenue and Cost Recognition

Revenues from aircraft sales are recognized upon the customers acceptance of the particular aircraft.

Rental income for aircraft leased on short-term leases is recognized monthly in accordance with those lease agreements.

Income Taxes

The Company is a limited liability company and has elected to be taxed as a partnership under the Internal Revenue Code of 1986. As such, the Company is not a tax paying entity for U.S. federal and state income tax purposes and accordingly, the accompanying balance sheets do not reflect any assets or liabilities for federal or state income taxes. Members allocable share of taxable income or loss is reported on the members tax returns.

Fair Value of Financial Instruments

The carrying values of accounts receivable and accounts payable and notes payable approximate fair values due to the short-term maturities of these instruments.

Recently Issued Accounting Pronouncements

In February 2006, the FASB issued SFAS No. 155, Accounting for Certain Hybrid Financial Instruments  an amendment of SFAS No. 133 and 140. This Statement simplifies accounting for certain hybrid financial instruments, eliminates the interim guidance in Statement 33 Implementation Issue No. D1, Application of Statement 133 to Beneficial Interest in Securitized Financial Assets, and eliminates a restriction of the passive derivative instruments that a qualifying special-purpose entity may hold. The Statement is effective for fiscal years beginning after September 15, 2006. The adoption of this Statement is not anticipated to have a material impact on the Partnerships financial statements.

In June 2006, FASB Interpretation No. 48, Accounting for Uncertainty in Income Taxes. This interpretation clarifies the accounting for uncertainty in income taxes recognized by prescribing a recognition threshold and measurement attribute for the financial statement recognition and measurement of a tax position taken or expected to be taken in a tax return. The Interpretation also provides guidance on derecognition, classification, interest and penalties, accounting in interim periods and disclosure. The Interpretation is effective for fiscal years beginning after December 15, 2006. This Interpretation is not anticipated to have a material impact on the Partnerships financial statements.

In September 2006, FASB issued SFAS No. 157, Fair Value Measurements. This Statement defines fair value, establishes a framework for measuring fair value in generally accepted accounting principles (GAAP) and expands disclosures about fair value measurements. The Statement does not require any new fair value measurements but could change the current practice in measuring current fair value measurements. The Statement is effective for fiscal years beginning after November 15, 2007. The Company does not anticipate that the adoption of this Statement will have a material impact on the Partnerships financialstatements.

3.    TRADE ACCOUNTS RECEIVABLE

As of December 31, 2006, trade accounts receivable consisted of the amount owed on a single aircraft sale. The customer is in possession and has the risks and the rewards of aircraft ownership but the Company is holding title to the aircraft until payment in full is received.

4.    NOTES PAYABLE

On May 18, 2006, Jetglobal, LLC signed a Term Note and Agreement with ComVest Capital, LLC. This original agreement was amended May 22, 2006. The final terms of this note included a principal sum of $4,257,000 all due and payable on or before May 10, 2007. The interest rate is 7% per annum during the original term of the loan. The interest rate increases to 7% until July 31, to 9.5% thereafter until October 31, 2006, and to 11.5% for any amounts due after November 1, 2006. Twelve aircraft that were part of the Omnibus Sale Agreement, mentioned in the note below on inventory, were conveyed as collateral security to ComVest. All interest payments were current at December 31, 2006.

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5.    INVENTORY

Inventories consisted of the following aircraft with associated costs:

|     |    |  |         |  |              |  |             
|---- | -- |  | ------- |  | ------------ |  | ------------
|     |    |  |         |  | December 31, |  | December 31,
|     |    |  |         |  | 2006         |  | 2005        
|    
|N301 | DL |  | 737-200 |  | 861,538      |  |             
|N302 | DL |  | 737-200 |  | 861,538      |  |             
|N303 | DL |  | 737-200 |  | 861,538      |  |             
|N304 | DL |  | 737-200 |  | 861,538      |  |             
|M305 | DL |  | 737-200 |  | 861,538      |  |             
|N306 | DL |  | 737-200 |  | 861,538      |  |             
|N307 | DL |  | 737-200 |  | 861,538      |  | 861,538     
|N308 | DL |  | 737-200 |  | 861,538      |  |             
|N309 | DL |  | 737-200 |  | 861,538      |  |             
|N314 | DL |  | 737-200 |  | 861,539      |  |             
|N316 | DL |  | 737-200 |  | 861,539      |  | 861,538     
|N317 | DL |  | 737-200 |  | 861,539      |  | 861,358     
|N318 | DL |  | 737-200 |  | 861,539      |  | 861,538     
|N320 | DL |  | 737-200 |  |              |  | 861,538     
|N321 | DL |  | 737-200 |  |              |  | 861,538     
|N322 | DL |  | 737-200 |  |              |  | 861,538     
|N323 | DL |  | 737-200 |  | 775,000      |  | 775,000     
|N326 | DL |  | 737-200 |  | 861,539      |  |             
|N327 | DL |  | 737-200 |  |              |  | 861,538     
|N328 | DL |  | 737-200 |  |              |  | 861,538     
|N329 | DL |  | 737-200 |  | 861,539      |  |             
|N330 | DL |  | 737-200 |  | 861,539      |  |             
|N332 | DL |  | 737-200 |  | 525,000      |  | 525,000     
|N334 | DL |  | 737-200 |  |              |  | 525,000     
|N382 | DL |  | 737-200 |  |              |  |             
|N937 | AS |  | MD80    |  | 1,150,000    |  |             
|     |    |  |         |  | $16,234,615  |  | 9,578,842   

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The Company acquired 26 aircraft that were all held in separate equipment trusts administered by Wilmington Trust Company through an Omnibus Sale Agreement. The aircraft were divided into two categories: one with 14 aircraft and one with 12. The 14 were conveyed by bill of sale. The 12 were used as collateral security to ComVest Capital, LLC.

The current inventory also has 2 aircraft that were part of the same fleet originally but were purchased by the company on the open market from other parties, as was the one MD80 in the inventory.

Delta Lease

Aircraft N301DL, N302DL, N303DL, N304DL, N305DL, N306DL, N308DL, N309DL, N314DL, N326DL, N329DL & N330DL were continued to be operated and leased by Delta Airlines for during most of year 2006. They were returned to Jetglobal during the 4thquarter of 2006. The total rent paid by Delta Airlines during the tenure of the lease was $1,893,232. These funds were paid directly to ComVest Capital and applied as principal and interest payment on the note discussed underNotes Payableabove.

6. MEMBER EQUITY ACCOUNTS

The operating agreement calls for member BCI Aircraft Leasing to be responsible for 75% of the costs and member Global Aircraft Solutions to be responsible for 25% of the costs for the partnership. However the profits and liquidation are to be split 70% to BCI and 30% to Global. An analysis of the partnership Cash In/Out accounts, at December 31, 2006, is presented below:

|                     |  |           |  |                   |  |                   | 
|-------------------- |  | --------- |  | ----------------- |  | ----------------- | 
|                     |  |           |  | 75%/25% of total  |  | Due from/(Due to) | 
|                     |  |           |  | Cash In/ Cash Out |  | Member            | 
|                     |  |           |  |                   |  |                   | 
|BCI Aircraft Leasing |  | 3,596,247 |  | 6,522,874         |  | (2,926,627)       | 
|                     |  |           |  |                   |  |                   | 
|Cash In/Out          |  |           |  |                   |  |                   | 
|Global Aircraft      |  | 5,100,918 |  | 2,174,291         |  | 2,926,627         | 
|Solutions Cash       |  |           |  |                   |  |                   | 
|In/Out               |  |           |  |                   |  |                   | 
|                     |  |           |  |                   |  |                   | 
|                    
|Total Cash in/Out    |  | 8,697,165 |  |                   |  |                   | 

As mentioned earlier, the two members agreed to wind up the operations of the Company in 2007. The members are negotiating a settlement for the exchange of consideration for the membership interest held by Global. (See Note 1.) 7. DEPOSITS

At December 31, 2005, the Company had $5.4 million on deposit in escrow related to the purchase of the 26 aircraft bought under the Omnibus Sales Agreement. At December 31,2006, these deposits had been used and the purchase of the original 26 aircraft was complete. At December 31, 2006, the Company had $350,000 on deposit related to supplying DIP financing for bankrupt Falcon Airlines. Subsequent to December 31, 2006, the presiding judge in the case has ordered the return of the $350.000.

8.    RELATED PARTY TRANSACTIONS

During 2005, Jetglobal had a sale rescinded due to a customer c anceling a sales agreement. This sale was guaranteed by BCI. In settlemelnt of the guarantee commitment to Jetglobal, BCI agreed to take the aircraft in a distribution from Jetglobal and provide Global with a payment equal to the share of lost earnings. As a result, BCI and Global entered into a settlement agreement for $1,957,692. This transaction was accounted for as a distribution to BCI in 2005 at the aircraft carrying value of $2,100,000. BCI settled its guarantee obligation directly with Global. The payment of $1,957,962 was made by BCI to Global in January 2006.

9.    CONCENTRATION OF REVENUES

During 2006,I sales to Northern Air Cargo comprised for 38% of Company revenue, Air Philippines comprised 30%, Royal Khmer Airlines comprised 19% and RAVSA comprised 14%.

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